Correlation Between Thungela Resources and Bowler Metcalf
Can any of the company-specific risk be diversified away by investing in both Thungela Resources and Bowler Metcalf 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 Thungela Resources and Bowler Metcalf into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Thungela Resources Limited and Bowler Metcalf, you can compare the effects of market volatilities on Thungela Resources and Bowler Metcalf 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 Thungela Resources with a short position of Bowler Metcalf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thungela Resources and Bowler Metcalf.
Diversification Opportunities for Thungela Resources and Bowler Metcalf
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Thungela and Bowler is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Thungela Resources Limited and Bowler Metcalf in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bowler Metcalf and Thungela Resources 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 Thungela Resources Limited are associated (or correlated) with Bowler Metcalf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bowler Metcalf has no effect on the direction of Thungela Resources i.e., Thungela Resources and Bowler Metcalf go up and down completely randomly.
Pair Corralation between Thungela Resources and Bowler Metcalf
Assuming the 90 days trading horizon Thungela Resources Limited is expected to generate 0.75 times more return on investment than Bowler Metcalf. However, Thungela Resources Limited is 1.34 times less risky than Bowler Metcalf. It trades about 0.25 of its potential returns per unit of risk. Bowler Metcalf is currently generating about 0.05 per unit of risk. If you would invest 1,093,500 in Thungela Resources Limited on August 28, 2024 and sell it today you would earn a total of 263,100 from holding Thungela Resources Limited or generate 24.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Thungela Resources Limited vs. Bowler Metcalf
Performance |
| Timeline |
| Thungela Resources |
| Bowler Metcalf |
Thungela Resources and Bowler Metcalf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Thungela Resources and Bowler Metcalf
The main advantage of trading using opposite Thungela Resources and Bowler Metcalf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Thungela Resources position performs unexpectedly, Bowler Metcalf 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 Bowler Metcalf will offset losses from the drop in Bowler Metcalf's long position.| Thungela Resources vs. Centaur Bci Balanced | Thungela Resources vs. Growthpoint Properties | Thungela Resources vs. Bowler Metcalf | Thungela Resources vs. Shoprite Holdings |
| Bowler Metcalf vs. Datatec | Bowler Metcalf vs. Deneb Investments | Bowler Metcalf vs. City Lodge Hotels | Bowler Metcalf vs. Zeder Investments |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Positions Ratings 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 | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |