Correlation Between Hosken Consolidated and Trematon Capital
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Trematon 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 Trematon 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 Trematon Capital Investments, you can compare the effects of market volatilities on Hosken Consolidated and Trematon 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 Trematon Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Trematon Capital.
Diversification Opportunities for Hosken Consolidated and Trematon Capital
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hosken and Trematon is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Trematon Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trematon Capital Inv 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 Trematon Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trematon Capital Inv has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Trematon Capital go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Trematon Capital
Assuming the 90 days trading horizon Hosken Consolidated is expected to generate 2.5 times less return on investment than Trematon Capital. But when comparing it to its historical volatility, Hosken Consolidated Investments is 2.84 times less risky than Trematon Capital. It trades about 0.01 of its potential returns per unit of risk. Trematon Capital Investments is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 32,000 in Trematon Capital Investments on October 21, 2024 and sell it today you would lose (8,600) from holding Trematon Capital Investments or give up 26.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Trematon Capital Investments
Performance |
| Timeline |
| Hosken Consolidated |
| Trematon Capital Inv |
Hosken Consolidated and Trematon Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Trematon Capital
The main advantage of trading using opposite Hosken Consolidated and Trematon Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Trematon 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 Trematon Capital will offset losses from the drop in Trematon Capital's long position.| Hosken Consolidated vs. City Lodge Hotels | Hosken Consolidated vs. Safari Investments RSA | Hosken Consolidated vs. Zeder Investments | Hosken Consolidated vs. CA Sales Holdings |
| Trematon Capital vs. CA Sales Holdings | Trematon Capital vs. Lesaka Technologies | Trematon Capital vs. Master Drilling Group | Trematon Capital 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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