Correlation Between Impala Platinum and EMedia Holdings
Can any of the company-specific risk be diversified away by investing in both Impala Platinum and EMedia Holdings 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 Impala Platinum and EMedia Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Impala Platinum Holdings and eMedia Holdings Limited, you can compare the effects of market volatilities on Impala Platinum and EMedia Holdings 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 Impala Platinum with a short position of EMedia Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Impala Platinum and EMedia Holdings.
Diversification Opportunities for Impala Platinum and EMedia Holdings
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Impala and EMedia is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Impala Platinum Holdings and eMedia Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on eMedia Holdings and Impala Platinum 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 Impala Platinum Holdings are associated (or correlated) with EMedia Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of eMedia Holdings has no effect on the direction of Impala Platinum i.e., Impala Platinum and EMedia Holdings go up and down completely randomly.
Pair Corralation between Impala Platinum and EMedia Holdings
Assuming the 90 days trading horizon Impala Platinum Holdings is expected to under-perform the EMedia Holdings. In addition to that, Impala Platinum is 1.47 times more volatile than eMedia Holdings Limited. It trades about -0.01 of its total potential returns per unit of risk. eMedia Holdings Limited is currently generating about 0.01 per unit of volatility. If you would invest 35,000 in eMedia Holdings Limited on August 31, 2024 and sell it today you would lose (2,000) from holding eMedia Holdings Limited or give up 5.71% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Impala Platinum Holdings vs. eMedia Holdings Limited
Performance |
| Timeline |
| Impala Platinum Holdings |
| eMedia Holdings |
Impala Platinum and EMedia Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Impala Platinum and EMedia Holdings
The main advantage of trading using opposite Impala Platinum and EMedia Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Impala Platinum position performs unexpectedly, EMedia Holdings 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 EMedia Holdings will offset losses from the drop in EMedia Holdings' long position.| Impala Platinum vs. Anglo American Platinum | Impala Platinum vs. Tharisa plc | Impala Platinum vs. Gemfields Group |
| EMedia Holdings vs. CA Sales Holdings | EMedia Holdings vs. Astral Foods | EMedia Holdings vs. Astoria Investments | EMedia Holdings vs. ABSA Bank Limited |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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