Correlation Between JSE and Indexco Limited
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By analyzing existing cross correlation between JSE Limited and Indexco Limited , you can compare the effects of market volatilities on JSE and Indexco Limited 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 JSE with a short position of Indexco Limited. Check out your portfolio center. Please also check ongoing floating volatility patterns of JSE and Indexco Limited.
Diversification Opportunities for JSE and Indexco Limited
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between JSE and Indexco is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding JSE Limited and Indexco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indexco Limited and JSE 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 JSE Limited are associated (or correlated) with Indexco Limited. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indexco Limited has no effect on the direction of JSE i.e., JSE and Indexco Limited go up and down completely randomly.
Pair Corralation between JSE and Indexco Limited
Assuming the 90 days trading horizon JSE Limited is expected to generate 1.93 times more return on investment than Indexco Limited. However, JSE is 1.93 times more volatile than Indexco Limited . It trades about 0.09 of its potential returns per unit of risk. Indexco Limited is currently generating about 0.07 per unit of risk. If you would invest 873,900 in JSE Limited on August 27, 2024 and sell it today you would earn a total of 337,500 from holding JSE Limited or generate 38.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
JSE Limited vs. Indexco Limited
Performance |
| Timeline |
| JSE Limited |
| Indexco Limited |
JSE and Indexco Limited Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JSE and Indexco Limited
The main advantage of trading using opposite JSE and Indexco Limited positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JSE position performs unexpectedly, Indexco Limited 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 Indexco Limited will offset losses from the drop in Indexco Limited's long position.| JSE vs. Prosus NV | JSE vs. Compagnie Financire Richemont | JSE vs. British American Tobacco | JSE vs. Glencore PLC |
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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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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