Correlation Between Zeder Investments and Nedbank
Can any of the company-specific risk be diversified away by investing in both Zeder Investments and Nedbank 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 Nedbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zeder Investments and Nedbank Group, you can compare the effects of market volatilities on Zeder Investments and Nedbank 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 Nedbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zeder Investments and Nedbank.
Diversification Opportunities for Zeder Investments and Nedbank
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Zeder and Nedbank is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Zeder Investments and Nedbank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nedbank 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 Nedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nedbank Group has no effect on the direction of Zeder Investments i.e., Zeder Investments and Nedbank go up and down completely randomly.
Pair Corralation between Zeder Investments and Nedbank
Assuming the 90 days trading horizon Zeder Investments is expected to under-perform the Nedbank. In addition to that, Zeder Investments is 1.27 times more volatile than Nedbank Group. It trades about -0.13 of its total potential returns per unit of risk. Nedbank Group is currently generating about -0.06 per unit of volatility. If you would invest 2,522,751 in Nedbank Group on January 17, 2025 and sell it today you would lose (114,751) from holding Nedbank Group or give up 4.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Zeder Investments vs. Nedbank Group
Performance |
| Timeline |
| Zeder Investments |
| Nedbank Group |
Zeder Investments and Nedbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zeder Investments and Nedbank
The main advantage of trading using opposite Zeder Investments and Nedbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zeder Investments position performs unexpectedly, Nedbank 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 Nedbank will offset losses from the drop in Nedbank's long position.| Zeder Investments vs. Harmony Gold Mining | Zeder Investments vs. Hosken Consolidated Investments | Zeder Investments vs. Trematon Capital Investments | Zeder Investments vs. HomeChoice Investments |
| Nedbank vs. ABSA Bank Limited | Nedbank vs. Capitec Bank Holdings | Nedbank vs. Standard Bank Group | Nedbank vs. Capitec Bank Holdings |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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