Correlation Between Shoprite Holdings and Marks Spencer
Can any of the company-specific risk be diversified away by investing in both Shoprite Holdings and Marks Spencer 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 Marks Spencer 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 Marks Spencer Group, you can compare the effects of market volatilities on Shoprite Holdings and Marks Spencer 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 Marks Spencer. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shoprite Holdings and Marks Spencer.
Diversification Opportunities for Shoprite Holdings and Marks Spencer
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Shoprite and Marks is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Shoprite Holdings Ltd and Marks Spencer Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marks Spencer Group 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 Marks Spencer. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marks Spencer Group has no effect on the direction of Shoprite Holdings i.e., Shoprite Holdings and Marks Spencer go up and down completely randomly.
Pair Corralation between Shoprite Holdings and Marks Spencer
Assuming the 90 days horizon Shoprite Holdings Ltd is expected to under-perform the Marks Spencer. In addition to that, Shoprite Holdings is 1.09 times more volatile than Marks Spencer Group. It trades about -0.03 of its total potential returns per unit of risk. Marks Spencer Group is currently generating about 0.04 per unit of volatility. If you would invest 992.00 in Marks Spencer Group on September 5, 2024 and sell it today you would earn a total of 13.00 from holding Marks Spencer Group or generate 1.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Shoprite Holdings Ltd vs. Marks Spencer Group
Performance |
| Timeline |
| Shoprite Holdings |
| Marks Spencer Group |
Shoprite Holdings and Marks Spencer Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shoprite Holdings and Marks Spencer
The main advantage of trading using opposite Shoprite Holdings and Marks Spencer positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shoprite Holdings position performs unexpectedly, Marks Spencer 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 Marks Spencer will offset losses from the drop in Marks Spencer'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 |
| Marks Spencer vs. Kohls Corp | Marks Spencer vs. Nordstrom | Marks Spencer vs. Macys Inc | Marks Spencer vs. Dillards |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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