Correlation Between Redefine Properties and Trencor
Can any of the company-specific risk be diversified away by investing in both Redefine Properties and Trencor 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 Redefine Properties and Trencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Redefine Properties and Trencor, you can compare the effects of market volatilities on Redefine Properties and Trencor 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 Redefine Properties with a short position of Trencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Redefine Properties and Trencor.
Diversification Opportunities for Redefine Properties and Trencor
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Redefine and Trencor is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Redefine Properties and Trencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trencor and Redefine Properties 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 Redefine Properties are associated (or correlated) with Trencor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trencor has no effect on the direction of Redefine Properties i.e., Redefine Properties and Trencor go up and down completely randomly.
Pair Corralation between Redefine Properties and Trencor
Assuming the 90 days trading horizon Redefine Properties is expected to under-perform the Trencor. In addition to that, Redefine Properties is 1.55 times more volatile than Trencor. It trades about -0.06 of its total potential returns per unit of risk. Trencor is currently generating about 0.08 per unit of volatility. If you would invest 79,700 in Trencor on November 2, 2024 and sell it today you would earn a total of 1,400 from holding Trencor or generate 1.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Redefine Properties vs. Trencor
Performance |
| Timeline |
| Redefine Properties |
| Trencor |
Redefine Properties and Trencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Redefine Properties and Trencor
The main advantage of trading using opposite Redefine Properties and Trencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Redefine Properties position performs unexpectedly, Trencor 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 Trencor will offset losses from the drop in Trencor's long position.| Redefine Properties vs. Astoria Investments | Redefine Properties vs. CA Sales Holdings | Redefine Properties vs. Bytes Technology | Redefine Properties vs. Frontier Transport Holdings |
| Trencor vs. Advtech | Trencor vs. Mantengu Mining | Trencor vs. Kumba Iron Ore | Trencor vs. Hosken Consolidated 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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