Correlation Between Shoprite Holdings and Henderson Investment
Can any of the company-specific risk be diversified away by investing in both Shoprite Holdings and Henderson Investment 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 Shoprite Holdings and Henderson Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shoprite Holdings Ltd and Henderson Investment Ltd, you can compare the effects of market volatilities on Shoprite Holdings and Henderson Investment 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 Shoprite Holdings with a short position of Henderson Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoprite Holdings and Henderson Investment.
Diversification Opportunities for Shoprite Holdings and Henderson Investment
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Shoprite and Henderson is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Shoprite Holdings Ltd and Henderson Investment Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Henderson Investment and Shoprite 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 Shoprite Holdings Ltd are associated (or correlated) with Henderson Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Henderson Investment has no effect on the direction of Shoprite Holdings i.e., Shoprite Holdings and Henderson Investment go up and down completely randomly.
Pair Corralation between Shoprite Holdings and Henderson Investment
Assuming the 90 days horizon Shoprite Holdings is expected to generate 12.94 times less return on investment than Henderson Investment. But when comparing it to its historical volatility, Shoprite Holdings Ltd is 9.09 times less risky than Henderson Investment. It trades about 0.03 of its potential returns per unit of risk. Henderson Investment Ltd is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 17.00 in Henderson Investment Ltd on September 12, 2024 and sell it today you would lose (6.00) from holding Henderson Investment Ltd or give up 35.29% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shoprite Holdings Ltd vs. Henderson Investment Ltd
Performance |
| Timeline |
| Shoprite Holdings |
| Henderson Investment |
Shoprite Holdings and Henderson Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoprite Holdings and Henderson Investment
The main advantage of trading using opposite Shoprite Holdings and Henderson Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoprite Holdings position performs unexpectedly, Henderson Investment 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 Henderson Investment will offset losses from the drop in Henderson Investment's long position.| Shoprite Holdings vs. Sanlam Ltd PK | Shoprite Holdings vs. Vodacom Group Ltd | Shoprite Holdings vs. Woolworths Holdings Ltd | Shoprite Holdings vs. Standard Bank Group |
| Henderson Investment vs. SM Investments | Henderson Investment vs. Dillards | Henderson Investment vs. Shoprite Holdings Ltd | Henderson Investment vs. Aquagold International |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |