Correlation Between Trematon Capital and S A P
Can any of the company-specific risk be diversified away by investing in both Trematon Capital and S A P 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 S A P 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 Sappi, you can compare the effects of market volatilities on Trematon Capital and S A P 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 S A P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trematon Capital and S A P.
Diversification Opportunities for Trematon Capital and S A P
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Trematon and SAP is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Trematon Capital Investments and Sappi in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sappi 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 S A P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sappi has no effect on the direction of Trematon Capital i.e., Trematon Capital and S A P go up and down completely randomly.
Pair Corralation between Trematon Capital and S A P
Assuming the 90 days trading horizon Trematon Capital Investments is expected to under-perform the S A P. In addition to that, Trematon Capital is 1.27 times more volatile than Sappi. It trades about -0.09 of its total potential returns per unit of risk. Sappi is currently generating about 0.11 per unit of volatility. If you would invest 476,600 in Sappi on September 1, 2024 and sell it today you would earn a total of 27,700 from holding Sappi or generate 5.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Trematon Capital Investments vs. Sappi
Performance |
| Timeline |
| Trematon Capital Inv |
| Sappi |
Trematon Capital and S A P Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trematon Capital and S A P
The main advantage of trading using opposite Trematon Capital and S A P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trematon Capital position performs unexpectedly, S A P 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 S A P will offset losses from the drop in S A P's long position.| Trematon Capital vs. Afine Investments | Trematon Capital vs. E Media Holdings | Trematon Capital vs. Master Drilling Group | Trematon Capital vs. African Media Entertainment |
| S A P vs. Sasol Ltd Bee | S A P vs. Growthpoint Properties | S A P vs. AfricaRhodium ETF | S A P vs. CoreShares Preference Share |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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