Correlation Between Nedbank and Blue Label
Can any of the company-specific risk be diversified away by investing in both Nedbank and Blue Label 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 Nedbank and Blue Label into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nedbank Group and Blue Label Telecoms, you can compare the effects of market volatilities on Nedbank and Blue Label 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 Nedbank with a short position of Blue Label. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nedbank and Blue Label.
Diversification Opportunities for Nedbank and Blue Label
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Nedbank and Blue is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nedbank Group and Blue Label Telecoms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blue Label Telecoms and Nedbank 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 Nedbank Group are associated (or correlated) with Blue Label. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blue Label Telecoms has no effect on the direction of Nedbank i.e., Nedbank and Blue Label go up and down completely randomly.
Pair Corralation between Nedbank and Blue Label
Assuming the 90 days trading horizon Nedbank Group is expected to under-perform the Blue Label. But the stock apears to be less risky and, when comparing its historical volatility, Nedbank Group is 1.28 times less risky than Blue Label. The stock trades about -0.07 of its potential returns per unit of risk. The Blue Label Telecoms is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 57,200 in Blue Label Telecoms on November 3, 2024 and sell it today you would earn a total of 7,300 from holding Blue Label Telecoms or generate 12.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nedbank Group vs. Blue Label Telecoms
Performance |
| Timeline |
| Nedbank Group |
| Blue Label Telecoms |
Nedbank and Blue Label Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nedbank and Blue Label
The main advantage of trading using opposite Nedbank and Blue Label positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nedbank position performs unexpectedly, Blue Label 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 Blue Label will offset losses from the drop in Blue Label's long position.| Nedbank vs. Brimstone Investment | Nedbank vs. MC Mining | Nedbank vs. Astral Foods | Nedbank vs. Ascendis Health |
| Blue Label vs. Reinet Investments SCA | Blue Label vs. Astoria Investments | Blue Label vs. HomeChoice Investments | Blue Label vs. Boxer Retail |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |