Correlation Between AFRICAN DISTILLERS and Cass Saddle

Can any of the company-specific risk be diversified away by investing in both AFRICAN DISTILLERS and Cass Saddle 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 AFRICAN DISTILLERS and Cass Saddle into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AFRICAN DISTILLERS LIMITED and Cass Saddle Agriculture, you can compare the effects of market volatilities on AFRICAN DISTILLERS and Cass Saddle 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 AFRICAN DISTILLERS with a short position of Cass Saddle. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFRICAN DISTILLERS and Cass Saddle.

Diversification Opportunities for AFRICAN DISTILLERS and Cass Saddle

-0.54

Correlation Coefficient

AFRICAN DISTILLERS  Cass Saddle

Excellent diversification

The 3 months correlation between AFRICAN and Cass is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding AFRICAN DISTILLERS LIMITED and Cass Saddle Agriculture in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cass Saddle Agriculture and AFRICAN DISTILLERS 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 AFRICAN DISTILLERS LIMITED are associated (or correlated) with Cass Saddle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cass Saddle Agriculture has no effect on the direction of AFRICAN DISTILLERS i.e., AFRICAN DISTILLERS and Cass Saddle go up and down completely randomly.

Pair Corralation between AFRICAN DISTILLERS and Cass Saddle

If you would invest  69,100  in AFRICAN DISTILLERS LIMITED on October 12, 2024 and sell it today you would earn a total of  900.00  from holding AFRICAN DISTILLERS LIMITED or generate 1.3% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

AFRICAN DISTILLERS LIMITED  vs.  Cass Saddle Agriculture

AFRICAN DISTILLERS

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AFRICAN DISTILLERS LIMITED are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong fundamental indicators, AFRICAN DISTILLERS is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Cass Saddle Agriculture

Risk-Adjusted Performance

28 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Cass Saddle Agriculture are ranked lower than 28 (%) of all global equities and portfolios over the last 90 days. In spite of fairly inconsistent basic indicators, Cass Saddle showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with AFRICAN DISTILLERS and Cass Saddle

The main advantage of trading using opposite AFRICAN DISTILLERS and Cass Saddle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFRICAN DISTILLERS position performs unexpectedly, Cass Saddle 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 Cass Saddle will offset losses from the drop in Cass Saddle's long position.

The idea behind AFRICAN DISTILLERS LIMITED and Cass Saddle Agriculture pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.