Correlation Between Safari Investments and Sibanye Stillwater
Can any of the company-specific risk be diversified away by investing in both Safari 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 Safari 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 Safari Investments RSA and Sibanye Stillwater, you can compare the effects of market volatilities on Safari 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 Safari Investments with a short position of Sibanye Stillwater. Check out your portfolio center. Please also check ongoing floating volatility patterns of Safari Investments and Sibanye Stillwater.
Diversification Opportunities for Safari Investments and Sibanye Stillwater
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Safari and Sibanye is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Safari Investments RSA and Sibanye Stillwater in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sibanye Stillwater and Safari 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 Safari Investments RSA 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 Safari Investments i.e., Safari Investments and Sibanye Stillwater go up and down completely randomly.
Pair Corralation between Safari Investments and Sibanye Stillwater
Assuming the 90 days trading horizon Safari Investments RSA is expected to generate 0.86 times more return on investment than Sibanye Stillwater. However, Safari Investments RSA is 1.17 times less risky than Sibanye Stillwater. It trades about 0.03 of its potential returns per unit of risk. Sibanye Stillwater is currently generating about 0.0 per unit of risk. If you would invest 56,100 in Safari Investments RSA on September 2, 2024 and sell it today you would earn a total of 6,400 from holding Safari Investments RSA or generate 11.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.78% |
| Values | Daily Returns |
Safari Investments RSA vs. Sibanye Stillwater
Performance |
| Timeline |
| Safari Investments RSA |
| Sibanye Stillwater |
Safari Investments and Sibanye Stillwater Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Safari Investments and Sibanye Stillwater
The main advantage of trading using opposite Safari Investments and Sibanye Stillwater positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Safari 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.| Safari Investments vs. Harmony Gold Mining | Safari Investments vs. Zeder Investments | Safari Investments vs. CA Sales Holdings | Safari Investments vs. Deneb Investments |
| 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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