Correlation Between Investec and SPENN Technology
Can any of the company-specific risk be diversified away by investing in both Investec and SPENN Technology 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 Investec and SPENN Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investec Group and SPENN Technology AS, you can compare the effects of market volatilities on Investec and SPENN Technology 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 Investec with a short position of SPENN Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Investec and SPENN Technology.
Diversification Opportunities for Investec and SPENN Technology
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Investec and SPENN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Investec Group and SPENN Technology AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPENN Technology and Investec 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 Investec Group are associated (or correlated) with SPENN Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPENN Technology has no effect on the direction of Investec i.e., Investec and SPENN Technology go up and down completely randomly.
Pair Corralation between Investec and SPENN Technology
Assuming the 90 days horizon Investec Group is expected to generate 0.94 times more return on investment than SPENN Technology. However, Investec Group is 1.07 times less risky than SPENN Technology. It trades about 0.07 of its potential returns per unit of risk. SPENN Technology AS is currently generating about -0.06 per unit of risk. If you would invest 978.00 in Investec Group on December 7, 2024 and sell it today you would earn a total of 642.00 from holding Investec Group or generate 65.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 96.36% |
| Values | Daily Returns |
Investec Group vs. SPENN Technology AS
Performance |
| Timeline |
| Investec Group |
| SPENN Technology |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
Investec and SPENN Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Investec and SPENN Technology
The main advantage of trading using opposite Investec and SPENN Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Investec position performs unexpectedly, SPENN Technology 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 SPENN Technology will offset losses from the drop in SPENN Technology's long position.| Investec vs. Romana Food Brands | Investec vs. Lifeway Foods | Investec vs. NH Foods Ltd | Investec vs. China Tontine Wines |
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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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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