Correlation Between Trematon Capital and Hosken Consolidated
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and Hosken Consolidated 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 Trematon Capital and Hosken Consolidated into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trematon Capital Investments and Hosken Consolidated Investments, you can compare the effects of market volatilities on Trematon Capital and Hosken Consolidated 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 Trematon Capital with a short position of Hosken Consolidated. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Hosken Consolidated.
Diversification Opportunities for Trematon Capital and Hosken Consolidated
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Trematon and Hosken is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Hosken Consolidated Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hosken Consolidated and Trematon Capital 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 Trematon Capital Investments are associated (or correlated) with Hosken Consolidated. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hosken Consolidated has no effect on the direction of Trematon Capital i.e., Trematon Capital and Hosken Consolidated go up and down completely randomly.
Pair Corralation between Trematon Capital and Hosken Consolidated
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 2.78 times more return on investment than Hosken Consolidated. However, Trematon Capital is 2.78 times more volatile than Hosken Consolidated Investments. It trades about 0.01 of its potential returns per unit of risk. Hosken Consolidated Investments is currently generating about 0.02 per unit of risk. If you would invest 28,384 in Trematon Capital Investments on August 30, 2024 and sell it today you would lose (5,084) from holding Trematon Capital Investments or give up 17.91% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trematon Capital Investments vs. Hosken Consolidated Investment
Performance |
| Timeline |
| Trematon Capital Inv |
| Hosken Consolidated |
Trematon Capital and Hosken Consolidated Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and Hosken Consolidated
The main advantage of trading using opposite Trematon Capital and Hosken Consolidated positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, Hosken Consolidated 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 Hosken Consolidated will offset losses from the drop in Hosken Consolidated's long position.| Trematon Capital vs. Lighthouse Capital | Trematon Capital vs. Growthpoint Properties | Trematon Capital vs. AfricaRhodium ETF | Trematon Capital vs. CoreShares Preference Share |
| Hosken Consolidated vs. Reinet Investments SCA | Hosken Consolidated vs. Afine Investments | Hosken Consolidated vs. Harmony Gold Mining | Hosken Consolidated vs. City Lodge Hotels |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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