Correlation Between Trematon Capital and MTN
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and MTN 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 MTN 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 MTN Group, you can compare the effects of market volatilities on Trematon Capital and MTN 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 MTN. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and MTN.
Diversification Opportunities for Trematon Capital and MTN
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Trematon and MTN is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and MTN Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MTN Group 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 MTN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MTN Group has no effect on the direction of Trematon Capital i.e., Trematon Capital and MTN go up and down completely randomly.
Pair Corralation between Trematon Capital and MTN
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 1.77 times more return on investment than MTN. However, Trematon Capital is 1.77 times more volatile than MTN Group. It trades about 0.16 of its potential returns per unit of risk. MTN Group is currently generating about -0.3 per unit of risk. If you would invest 23,600 in Trematon Capital Investments on August 28, 2024 and sell it today you would earn a total of 1,900 from holding Trematon Capital Investments or generate 8.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trematon Capital Investments vs. MTN Group
Performance |
| Timeline |
| Trematon Capital Inv |
| MTN Group |
Trematon Capital and MTN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and MTN
The main advantage of trading using opposite Trematon Capital and MTN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, MTN 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 MTN will offset losses from the drop in MTN's long position.| Trematon Capital vs. Lighthouse Capital | Trematon Capital vs. Centaur Bci Balanced | Trematon Capital vs. Sabvest Capital | Trematon Capital vs. Growthpoint Properties |
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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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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