Correlation Between Reinet Investments and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both Reinet Investments and Sibanye Stillwater 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 Reinet Investments and Sibanye Stillwater into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Reinet Investments SCA and Sibanye Stillwater, you can compare the effects of market volatilities on Reinet Investments and Sibanye Stillwater 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 Reinet Investments with a short position of Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Reinet Investments and Sibanye Stillwater.
Diversification Opportunities for Reinet Investments and Sibanye Stillwater
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Reinet and Sibanye is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Reinet Investments SCA and Sibanye Stillwater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater and Reinet Investments 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 Reinet Investments SCA are associated (or correlated) with Sibanye Stillwater. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sibanye Stillwater has no effect on the direction of Reinet Investments i.e., Reinet Investments and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between Reinet Investments and Sibanye Stillwater
Assuming the 90 days trading horizon Reinet Investments SCA is expected to generate 0.34 times more return on investment than Sibanye Stillwater. However, Reinet Investments SCA is 2.9 times less risky than Sibanye Stillwater. It trades about 0.04 of its potential returns per unit of risk. Sibanye Stillwater is currently generating about 0.0 per unit of risk. If you would invest 4,292,358 in Reinet Investments SCA on September 2, 2024 and sell it today you would earn a total of 503,442 from holding Reinet Investments SCA or generate 11.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Reinet Investments SCA vs. Sibanye Stillwater
Performance |
| Timeline |
| Reinet Investments SCA |
| Sibanye Stillwater |
Reinet Investments and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Reinet Investments and Sibanye Stillwater
The main advantage of trading using opposite Reinet Investments and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Reinet Investments position performs unexpectedly, Sibanye Stillwater 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 Sibanye Stillwater will offset losses from the drop in Sibanye Stillwater's long position.| Reinet Investments vs. Zeder Investments | Reinet Investments vs. Sabvest Capital | Reinet Investments vs. Universal Partners |
| Sibanye Stillwater vs. Kumba Iron Ore | Sibanye Stillwater vs. Reinet Investments SCA | Sibanye Stillwater vs. Harmony Gold Mining | Sibanye Stillwater vs. Safari Investments RSA |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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