Correlation Between Hosken Consolidated and Lighthouse Capital
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Lighthouse Capital 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 Lighthouse Capital 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 Lighthouse Capital, you can compare the effects of market volatilities on Hosken Consolidated and Lighthouse Capital 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 Lighthouse Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Lighthouse Capital.
Diversification Opportunities for Hosken Consolidated and Lighthouse Capital
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hosken and Lighthouse is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Lighthouse Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighthouse Capital 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 Lighthouse Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighthouse Capital has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Lighthouse Capital go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Lighthouse Capital
Assuming the 90 days trading horizon Hosken Consolidated Investments is expected to under-perform the Lighthouse Capital. In addition to that, Hosken Consolidated is 2.26 times more volatile than Lighthouse Capital. It trades about -0.07 of its total potential returns per unit of risk. Lighthouse Capital is currently generating about -0.02 per unit of volatility. If you would invest 80,100 in Lighthouse Capital on September 12, 2024 and sell it today you would lose (800.00) from holding Lighthouse Capital or give up 1.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Lighthouse Capital
Performance |
| Timeline |
| Hosken Consolidated |
| Lighthouse Capital |
Hosken Consolidated and Lighthouse Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Lighthouse Capital
The main advantage of trading using opposite Hosken Consolidated and Lighthouse Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Lighthouse Capital 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 Lighthouse Capital will offset losses from the drop in Lighthouse Capital's long position.| Hosken Consolidated vs. Bidvest Group | Hosken Consolidated vs. Kap Industrial Holdings | Hosken Consolidated vs. Deneb Investments | Hosken Consolidated vs. Brikor |
| Lighthouse Capital vs. AfroCentric Investment Corp | Lighthouse Capital vs. MC Mining | Lighthouse Capital vs. HomeChoice Investments | Lighthouse Capital vs. Safari Investments RSA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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