Correlation Between Rand Mining and ARN Media
Can any of the company-specific risk be diversified away by investing in both Rand Mining and ARN Media 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 Rand Mining and ARN Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rand Mining and ARN Media Limited, you can compare the effects of market volatilities on Rand Mining and ARN Media 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 Rand Mining with a short position of ARN Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rand Mining and ARN Media.
Diversification Opportunities for Rand Mining and ARN Media
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Rand and ARN is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Rand Mining and ARN Media Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ARN Media Limited and Rand Mining 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 Rand Mining are associated (or correlated) with ARN Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ARN Media Limited has no effect on the direction of Rand Mining i.e., Rand Mining and ARN Media go up and down completely randomly.
Pair Corralation between Rand Mining and ARN Media
Assuming the 90 days trading horizon Rand Mining is expected to generate 1.59 times more return on investment than ARN Media. However, Rand Mining is 1.59 times more volatile than ARN Media Limited. It trades about 0.13 of its potential returns per unit of risk. ARN Media Limited is currently generating about -0.15 per unit of risk. If you would invest 148.00 in Rand Mining on November 6, 2024 and sell it today you would earn a total of 10.00 from holding Rand Mining or generate 6.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
Rand Mining vs. ARN Media Limited
Performance |
| Timeline |
| Rand Mining |
| ARN Media Limited |
Rand Mining and ARN Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rand Mining and ARN Media
The main advantage of trading using opposite Rand Mining and ARN Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rand Mining position performs unexpectedly, ARN Media 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 ARN Media will offset losses from the drop in ARN Media's long position.| Rand Mining vs. Ramsay Health Care | Rand Mining vs. Regis Healthcare | Rand Mining vs. Everest Metals | Rand Mining vs. Sky Metals |
| ARN Media vs. Kneomedia | ARN Media vs. Southern Cross Media | ARN Media vs. FireFly Metals | ARN Media vs. oOhMedia |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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