Correlation Between SOCKET MOBILE and PEPKOR
Can any of the company-specific risk be diversified away by investing in both SOCKET MOBILE and PEPKOR 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 SOCKET MOBILE and PEPKOR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SOCKET MOBILE NEW and PEPKOR LTD, you can compare the effects of market volatilities on SOCKET MOBILE and PEPKOR 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 SOCKET MOBILE with a short position of PEPKOR. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOCKET MOBILE and PEPKOR.
Diversification Opportunities for SOCKET MOBILE and PEPKOR
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SOCKET and PEPKOR is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding SOCKET MOBILE NEW and PEPKOR LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PEPKOR LTD and SOCKET MOBILE 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 SOCKET MOBILE NEW are associated (or correlated) with PEPKOR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PEPKOR LTD has no effect on the direction of SOCKET MOBILE i.e., SOCKET MOBILE and PEPKOR go up and down completely randomly.
Pair Corralation between SOCKET MOBILE and PEPKOR
Assuming the 90 days trading horizon SOCKET MOBILE is expected to generate 1.71 times less return on investment than PEPKOR. But when comparing it to its historical volatility, SOCKET MOBILE NEW is 1.44 times less risky than PEPKOR. It trades about 0.11 of its potential returns per unit of risk. PEPKOR LTD is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 58.00 in PEPKOR LTD on November 3, 2024 and sell it today you would earn a total of 70.00 from holding PEPKOR LTD or generate 120.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SOCKET MOBILE NEW vs. PEPKOR LTD
Performance |
| Timeline |
| SOCKET MOBILE NEW |
| PEPKOR LTD |
SOCKET MOBILE and PEPKOR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOCKET MOBILE and PEPKOR
The main advantage of trading using opposite SOCKET MOBILE and PEPKOR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOCKET MOBILE position performs unexpectedly, PEPKOR 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 PEPKOR will offset losses from the drop in PEPKOR's long position.| SOCKET MOBILE vs. SIVERS SEMICONDUCTORS AB | SOCKET MOBILE vs. NorAm Drilling AS | SOCKET MOBILE vs. Volkswagen AG | SOCKET MOBILE vs. Darden Restaurants |
| PEPKOR vs. Addus HomeCare | PEPKOR vs. Shin Etsu Chemical Co | PEPKOR vs. HAVERTY FURNITURE A | PEPKOR vs. China BlueChemical |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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