Correlation Between Kumba Iron and Deneb Investments
Can any of the company-specific risk be diversified away by investing in both Kumba Iron and Deneb Investments 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 Kumba Iron and Deneb Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kumba Iron Ore and Deneb Investments, you can compare the effects of market volatilities on Kumba Iron and Deneb Investments 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 Kumba Iron with a short position of Deneb Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumba Iron and Deneb Investments.
Diversification Opportunities for Kumba Iron and Deneb Investments
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kumba and Deneb is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kumba Iron Ore and Deneb Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Deneb Investments and Kumba Iron 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 Kumba Iron Ore are associated (or correlated) with Deneb Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Deneb Investments has no effect on the direction of Kumba Iron i.e., Kumba Iron and Deneb Investments go up and down completely randomly.
Pair Corralation between Kumba Iron and Deneb Investments
Assuming the 90 days trading horizon Kumba Iron Ore is expected to generate 1.06 times more return on investment than Deneb Investments. However, Kumba Iron is 1.06 times more volatile than Deneb Investments. It trades about 0.3 of its potential returns per unit of risk. Deneb Investments is currently generating about 0.18 per unit of risk. If you would invest 3,320,600 in Kumba Iron Ore on November 3, 2024 and sell it today you would earn a total of 565,700 from holding Kumba Iron Ore or generate 17.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Kumba Iron Ore vs. Deneb Investments
Performance |
| Timeline |
| Kumba Iron Ore |
| Deneb Investments |
Kumba Iron and Deneb Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumba Iron and Deneb Investments
The main advantage of trading using opposite Kumba Iron and Deneb Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumba Iron position performs unexpectedly, Deneb Investments 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 Deneb Investments will offset losses from the drop in Deneb Investments' long position.| Kumba Iron vs. Reinet Investments SCA | Kumba Iron vs. Trematon Capital Investments | Kumba Iron vs. RCL Foods | Kumba Iron vs. Nedbank Group |
| Deneb Investments vs. Safari Investments RSA | Deneb Investments vs. Capitec Bank Holdings | Deneb Investments vs. Zeder Investments | Deneb Investments vs. Mantengu Mining |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |