Correlation Between Kumba Iron and Oasis Crescent
Can any of the company-specific risk be diversified away by investing in both Kumba Iron and Oasis Crescent 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 Oasis Crescent 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 Oasis Crescent Property, you can compare the effects of market volatilities on Kumba Iron and Oasis Crescent 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 Oasis Crescent. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kumba Iron and Oasis Crescent.
Diversification Opportunities for Kumba Iron and Oasis Crescent
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kumba and Oasis is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kumba Iron Ore and Oasis Crescent Property in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oasis Crescent Property 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 Oasis Crescent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oasis Crescent Property has no effect on the direction of Kumba Iron i.e., Kumba Iron and Oasis Crescent go up and down completely randomly.
Pair Corralation between Kumba Iron and Oasis Crescent
Assuming the 90 days trading horizon Kumba Iron Ore is expected to generate 3.55 times more return on investment than Oasis Crescent. However, Kumba Iron is 3.55 times more volatile than Oasis Crescent Property. It trades about 0.02 of its potential returns per unit of risk. Oasis Crescent Property is currently generating about -0.12 per unit of risk. If you would invest 3,455,000 in Kumba Iron Ore on September 5, 2024 and sell it today you would earn a total of 12,500 from holding Kumba Iron Ore or generate 0.36% 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. Oasis Crescent Property
Performance |
| Timeline |
| Kumba Iron Ore |
| Oasis Crescent Property |
Kumba Iron and Oasis Crescent Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kumba Iron and Oasis Crescent
The main advantage of trading using opposite Kumba Iron and Oasis Crescent positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kumba Iron position performs unexpectedly, Oasis Crescent 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 Oasis Crescent will offset losses from the drop in Oasis Crescent's long position.| Kumba Iron vs. RCL Foods | Kumba Iron vs. Astoria Investments | Kumba Iron vs. Europa Metals | Kumba Iron vs. Standard Bank Group |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
Other Complementary Tools
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data |