Correlation Between Sabvest Capital and Afrimat
Can any of the company-specific risk be diversified away by investing in both Sabvest Capital and Afrimat 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 Sabvest Capital and Afrimat into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sabvest Capital and Afrimat, you can compare the effects of market volatilities on Sabvest Capital and Afrimat 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 Sabvest Capital with a short position of Afrimat. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sabvest Capital and Afrimat.
Diversification Opportunities for Sabvest Capital and Afrimat
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sabvest and Afrimat is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Sabvest Capital and Afrimat in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Afrimat and Sabvest Capital 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 Sabvest Capital are associated (or correlated) with Afrimat. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Afrimat has no effect on the direction of Sabvest Capital i.e., Sabvest Capital and Afrimat go up and down completely randomly.
Pair Corralation between Sabvest Capital and Afrimat
Assuming the 90 days trading horizon Sabvest Capital is expected to generate 1.32 times more return on investment than Afrimat. However, Sabvest Capital is 1.32 times more volatile than Afrimat. It trades about 0.06 of its potential returns per unit of risk. Afrimat is currently generating about 0.05 per unit of risk. If you would invest 725,299 in Sabvest Capital on September 12, 2024 and sell it today you would earn a total of 203,701 from holding Sabvest Capital or generate 28.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sabvest Capital vs. Afrimat
Performance |
| Timeline |
| Sabvest Capital |
| Afrimat |
Sabvest Capital and Afrimat Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sabvest Capital and Afrimat
The main advantage of trading using opposite Sabvest Capital and Afrimat positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sabvest Capital position performs unexpectedly, Afrimat 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 Afrimat will offset losses from the drop in Afrimat's long position.| Sabvest Capital vs. African Media Entertainment | Sabvest Capital vs. We Buy Cars | Sabvest Capital vs. Zeder Investments | Sabvest Capital vs. Astral Foods |
| Afrimat vs. Sasol Ltd Bee | Afrimat vs. Centaur Bci Balanced | Afrimat vs. Sabvest Capital | Afrimat vs. Growthpoint Properties |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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