Correlation Between Rex Trueform and Libstar Holdings
Can any of the company-specific risk be diversified away by investing in both Rex Trueform and Libstar Holdings 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 Rex Trueform and Libstar Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rex Trueform Group and Libstar Holdings, you can compare the effects of market volatilities on Rex Trueform and Libstar Holdings 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 Rex Trueform with a short position of Libstar Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rex Trueform and Libstar Holdings.
Diversification Opportunities for Rex Trueform and Libstar Holdings
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rex and Libstar is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Rex Trueform Group and Libstar Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Libstar Holdings and Rex Trueform 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 Rex Trueform Group are associated (or correlated) with Libstar Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Libstar Holdings has no effect on the direction of Rex Trueform i.e., Rex Trueform and Libstar Holdings go up and down completely randomly.
Pair Corralation between Rex Trueform and Libstar Holdings
Assuming the 90 days trading horizon Rex Trueform Group is expected to under-perform the Libstar Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Rex Trueform Group is 1.04 times less risky than Libstar Holdings. The stock trades about -0.03 of its potential returns per unit of risk. The Libstar Holdings is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 38,500 in Libstar Holdings on September 3, 2024 and sell it today you would earn a total of 3,600 from holding Libstar Holdings or generate 9.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.32% |
| Values | Daily Returns |
Rex Trueform Group vs. Libstar Holdings
Performance |
| Timeline |
| Rex Trueform Group |
| Libstar Holdings |
Rex Trueform and Libstar Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rex Trueform and Libstar Holdings
The main advantage of trading using opposite Rex Trueform and Libstar Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rex Trueform position performs unexpectedly, Libstar Holdings 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 Libstar Holdings will offset losses from the drop in Libstar Holdings' long position.| Rex Trueform vs. Mr Price Group | Rex Trueform vs. Sasol Ltd Bee | Rex Trueform vs. Centaur Bci Balanced | Rex Trueform vs. Sabvest Capital |
| Libstar Holdings vs. Trellidor Holdings | Libstar Holdings vs. Prosus NV | Libstar Holdings vs. Rex Trueform Group | Libstar Holdings vs. Gold Fields |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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