Correlation Between Hosken Consolidated and Aveng
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Aveng at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Hosken Consolidated and Aveng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hosken Consolidated Investments and Aveng, you can compare the effects of market volatilities on Hosken Consolidated and Aveng and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Hosken Consolidated with a short position of Aveng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Aveng.
Diversification Opportunities for Hosken Consolidated and Aveng
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Hosken and Aveng is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Aveng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveng and Hosken Consolidated is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Hosken Consolidated Investments are associated (or correlated) with Aveng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveng has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Aveng go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Aveng
Assuming the 90 days trading horizon Hosken Consolidated Investments is expected to under-perform the Aveng. But the stock apears to be less risky and, when comparing its historical volatility, Hosken Consolidated Investments is 1.98 times less risky than Aveng. The stock trades about -0.03 of its potential returns per unit of risk. The Aveng is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 70,000 in Aveng on September 5, 2024 and sell it today you would earn a total of 47,500 from holding Aveng or generate 67.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Aveng
Performance |
| Timeline |
| Hosken Consolidated |
| Aveng |
Hosken Consolidated and Aveng Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Aveng
The main advantage of trading using opposite Hosken Consolidated and Aveng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Aveng can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Aveng will offset losses from the drop in Aveng's long position.| Hosken Consolidated vs. Zeder Investments | Hosken Consolidated vs. Bytes Technology | Hosken Consolidated vs. City Lodge Hotels | Hosken Consolidated vs. Reinet Investments SCA |
| Aveng vs. RCL Foods | Aveng vs. Brimstone Investment | Aveng vs. Europa Metals | Aveng vs. Reinet Investments SCA |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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