Correlation Between Trematon Capital and Netcare
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and Netcare 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 Netcare 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 Netcare, you can compare the effects of market volatilities on Trematon Capital and Netcare 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 Netcare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and Netcare.
Diversification Opportunities for Trematon Capital and Netcare
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Trematon and Netcare is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Netcare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Netcare 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 Netcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Netcare has no effect on the direction of Trematon Capital i.e., Trematon Capital and Netcare go up and down completely randomly.
Pair Corralation between Trematon Capital and Netcare
Assuming the 90 days trading horizon Trematon Capital Investments is expected to generate 3.01 times more return on investment than Netcare. However, Trematon Capital is 3.01 times more volatile than Netcare. It trades about 0.03 of its potential returns per unit of risk. Netcare is currently generating about 0.04 per unit of risk. If you would invest 20,000 in Trematon Capital Investments on September 14, 2024 and sell it today you would earn a total of 2,500 from holding Trematon Capital Investments or generate 12.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Trematon Capital Investments vs. Netcare
Performance |
| Timeline |
| Trematon Capital Inv |
| Netcare |
Trematon Capital and Netcare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and Netcare
The main advantage of trading using opposite Trematon Capital and Netcare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, Netcare 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 Netcare will offset losses from the drop in Netcare's long position.| Trematon Capital vs. Sasol Ltd Bee | Trematon Capital vs. Centaur Bci Balanced | Trematon Capital vs. Growthpoint Properties | Trematon Capital vs. Coronation Global Equity |
| Netcare vs. HomeChoice Investments | Netcare vs. RCL Foods | Netcare vs. Allied Electronics | Netcare vs. Safari Investments RSA |
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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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