Correlation Between Nampak and Safari Investments
Can any of the company-specific risk be diversified away by investing in both Nampak and Safari 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 Nampak and Safari Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Nampak and Safari Investments RSA, you can compare the effects of market volatilities on Nampak and Safari 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 Nampak with a short position of Safari Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nampak and Safari Investments.
Diversification Opportunities for Nampak and Safari Investments
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nampak and Safari is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Nampak and Safari Investments RSA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safari Investments RSA and Nampak 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 Nampak are associated (or correlated) with Safari Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safari Investments RSA has no effect on the direction of Nampak i.e., Nampak and Safari Investments go up and down completely randomly.
Pair Corralation between Nampak and Safari Investments
Assuming the 90 days trading horizon Nampak is expected to generate 1.09 times more return on investment than Safari Investments. However, Nampak is 1.09 times more volatile than Safari Investments RSA. It trades about 0.21 of its potential returns per unit of risk. Safari Investments RSA is currently generating about 0.06 per unit of risk. If you would invest 1,780,000 in Nampak on September 2, 2024 and sell it today you would earn a total of 2,583,200 from holding Nampak or generate 145.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.64% |
| Values | Daily Returns |
Nampak vs. Safari Investments RSA
Performance |
| Timeline |
| Nampak |
| Safari Investments RSA |
Nampak and Safari Investments Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Nampak and Safari Investments
The main advantage of trading using opposite Nampak and Safari Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nampak position performs unexpectedly, Safari 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 Safari Investments will offset losses from the drop in Safari Investments' long position.| Nampak vs. Safari Investments RSA | Nampak vs. Blue Label Telecoms | Nampak vs. Trematon Capital Investments | Nampak vs. HomeChoice Investments |
| Safari Investments vs. Harmony Gold Mining | Safari Investments vs. Zeder Investments | Safari Investments vs. CA Sales Holdings | Safari Investments vs. Deneb Investments |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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