Correlation Between Zeder Investments and EnX
Can any of the company-specific risk be diversified away by investing in both Zeder Investments and EnX 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 Zeder Investments and EnX into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeder Investments and enX Group, you can compare the effects of market volatilities on Zeder Investments and EnX 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 Zeder Investments with a short position of EnX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeder Investments and EnX.
Diversification Opportunities for Zeder Investments and EnX
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Zeder and EnX is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments and enX Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on enX Group and Zeder Investments 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 Zeder Investments are associated (or correlated) with EnX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of enX Group has no effect on the direction of Zeder Investments i.e., Zeder Investments and EnX go up and down completely randomly.
Pair Corralation between Zeder Investments and EnX
Assuming the 90 days trading horizon Zeder Investments is expected to under-perform the EnX. But the stock apears to be less risky and, when comparing its historical volatility, Zeder Investments is 1.98 times less risky than EnX. The stock trades about -0.21 of its potential returns per unit of risk. The enX Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 50,000 in enX Group on December 4, 2024 and sell it today you would earn a total of 2,000 from holding enX Group or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Zeder Investments vs. enX Group
Performance |
| Timeline |
| Zeder Investments |
| enX Group |
Zeder Investments and EnX Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeder Investments and EnX
The main advantage of trading using opposite Zeder Investments and EnX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeder Investments position performs unexpectedly, EnX 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 EnX will offset losses from the drop in EnX's long position.| Zeder Investments vs. Life Healthcare | Zeder Investments vs. MC Mining | Zeder Investments vs. Advtech | Zeder Investments vs. Boxer Retail |
| EnX vs. CA Sales Holdings | EnX vs. ABSA Bank Limited | EnX vs. African Media Entertainment | EnX vs. Master Drilling Group |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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