Correlation Between Sebata Holdings and Kap Industrial
Can any of the company-specific risk be diversified away by investing in both Sebata Holdings and Kap Industrial 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 Sebata Holdings and Kap Industrial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sebata Holdings and Kap Industrial Holdings, you can compare the effects of market volatilities on Sebata Holdings and Kap Industrial 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 Sebata Holdings with a short position of Kap Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sebata Holdings and Kap Industrial.
Diversification Opportunities for Sebata Holdings and Kap Industrial
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sebata and Kap is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Sebata Holdings and Kap Industrial Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kap Industrial Holdings and Sebata Holdings 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 Sebata Holdings are associated (or correlated) with Kap Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kap Industrial Holdings has no effect on the direction of Sebata Holdings i.e., Sebata Holdings and Kap Industrial go up and down completely randomly.
Pair Corralation between Sebata Holdings and Kap Industrial
Assuming the 90 days trading horizon Sebata Holdings is expected to under-perform the Kap Industrial. In addition to that, Sebata Holdings is 2.58 times more volatile than Kap Industrial Holdings. It trades about -0.07 of its total potential returns per unit of risk. Kap Industrial Holdings is currently generating about -0.03 per unit of volatility. If you would invest 35,800 in Kap Industrial Holdings on September 4, 2024 and sell it today you would lose (1,400) from holding Kap Industrial Holdings or give up 3.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
Sebata Holdings vs. Kap Industrial Holdings
Performance |
| Timeline |
| Sebata Holdings |
| Kap Industrial Holdings |
Sebata Holdings and Kap Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sebata Holdings and Kap Industrial
The main advantage of trading using opposite Sebata Holdings and Kap Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sebata Holdings position performs unexpectedly, Kap Industrial 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 Kap Industrial will offset losses from the drop in Kap Industrial's long position.| Sebata Holdings vs. Kap Industrial Holdings | Sebata Holdings vs. Astral Foods | Sebata Holdings vs. Blue Label Telecoms | Sebata Holdings vs. Master Drilling Group |
| Kap Industrial vs. Astoria Investments | Kap Industrial vs. Deneb Investments | Kap Industrial vs. Lesaka Technologies | Kap Industrial vs. Kumba Iron Ore |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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