Correlation Between Renergen and Trencor
Can any of the company-specific risk be diversified away by investing in both Renergen 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 Renergen and Trencor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Renergen and Trencor, you can compare the effects of market volatilities on Renergen 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 Renergen with a short position of Trencor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Renergen and Trencor.
Diversification Opportunities for Renergen and Trencor
Very good diversification
The 3 months correlation between Renergen and Trencor is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Renergen and Trencor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trencor and Renergen 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 Renergen 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 Renergen i.e., Renergen and Trencor go up and down completely randomly.
Pair Corralation between Renergen and Trencor
Assuming the 90 days trading horizon Renergen is expected to under-perform the Trencor. In addition to that, Renergen is 1.3 times more volatile than Trencor. It trades about -0.09 of its total potential returns per unit of risk. Trencor is currently generating about 0.09 per unit of volatility. If you would invest 73,500 in Trencor on August 30, 2024 and sell it today you would earn a total of 2,500 from holding Trencor or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Renergen vs. Trencor
Performance |
| Timeline |
| Renergen |
| Trencor |
Renergen and Trencor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Renergen and Trencor
The main advantage of trading using opposite Renergen and Trencor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Renergen 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.| Renergen vs. Sasol Ltd Bee | Renergen vs. Growthpoint Properties | Renergen vs. AfricaRhodium ETF | Renergen vs. CoreShares Preference Share |
| Trencor vs. Afine Investments | Trencor vs. Astral Foods | Trencor vs. Copper 360 | Trencor vs. Reinet Investments SCA |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |