Correlation Between Kap Industrial and Resilient Property
Can any of the company-specific risk be diversified away by investing in both Kap Industrial and Resilient Property 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 Kap Industrial and Resilient Property into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kap Industrial Holdings and Resilient Property Income, you can compare the effects of market volatilities on Kap Industrial and Resilient Property 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 Kap Industrial with a short position of Resilient Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kap Industrial and Resilient Property.
Diversification Opportunities for Kap Industrial and Resilient Property
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kap and Resilient is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Kap Industrial Holdings and Resilient Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Resilient Property Income and Kap Industrial 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 Kap Industrial Holdings are associated (or correlated) with Resilient Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Resilient Property Income has no effect on the direction of Kap Industrial i.e., Kap Industrial and Resilient Property go up and down completely randomly.
Pair Corralation between Kap Industrial and Resilient Property
Assuming the 90 days trading horizon Kap Industrial is expected to generate 1.29 times less return on investment than Resilient Property. In addition to that, Kap Industrial is 1.77 times more volatile than Resilient Property Income. It trades about 0.03 of its total potential returns per unit of risk. Resilient Property Income is currently generating about 0.08 per unit of volatility. If you would invest 423,600 in Resilient Property Income on September 12, 2024 and sell it today you would earn a total of 186,900 from holding Resilient Property Income or generate 44.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kap Industrial Holdings vs. Resilient Property Income
Performance |
| Timeline |
| Kap Industrial Holdings |
| Resilient Property Income |
Kap Industrial and Resilient Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kap Industrial and Resilient Property
The main advantage of trading using opposite Kap Industrial and Resilient Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kap Industrial position performs unexpectedly, Resilient Property 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 Resilient Property will offset losses from the drop in Resilient Property's long position.| Kap Industrial vs. Kumba Iron Ore | Kap Industrial vs. Trematon Capital Investments | Kap Industrial vs. Harmony Gold Mining | Kap Industrial vs. Bytes Technology |
| Resilient Property vs. Reinet Investments SCA | Resilient Property vs. CA Sales Holdings | Resilient Property vs. Standard Bank Group | Resilient Property 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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