Correlation Between Argent and MultiChoice
Can any of the company-specific risk be diversified away by investing in both Argent and MultiChoice 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 Argent and MultiChoice into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Argent and MultiChoice Group, you can compare the effects of market volatilities on Argent and MultiChoice 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 Argent with a short position of MultiChoice. Check out your portfolio center. Please also check ongoing floating volatility patterns of Argent and MultiChoice.
Diversification Opportunities for Argent and MultiChoice
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Argent and MultiChoice is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Argent and MultiChoice Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MultiChoice Group and Argent 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 Argent are associated (or correlated) with MultiChoice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MultiChoice Group has no effect on the direction of Argent i.e., Argent and MultiChoice go up and down completely randomly.
Pair Corralation between Argent and MultiChoice
Assuming the 90 days trading horizon Argent is expected to generate 2.25 times more return on investment than MultiChoice. However, Argent is 2.25 times more volatile than MultiChoice Group. It trades about 0.13 of its potential returns per unit of risk. MultiChoice Group is currently generating about 0.03 per unit of risk. If you would invest 213,000 in Argent on September 25, 2024 and sell it today you would earn a total of 62,000 from holding Argent or generate 29.11% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Argent vs. MultiChoice Group
Performance |
Timeline |
Argent |
MultiChoice Group |
Argent and MultiChoice Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Argent and MultiChoice
The main advantage of trading using opposite Argent and MultiChoice positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Argent position performs unexpectedly, MultiChoice 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 MultiChoice will offset losses from the drop in MultiChoice's long position.Argent vs. Kumba Iron Ore | Argent vs. ArcelorMittal South Africa | Argent vs. City Lodge Hotels | Argent vs. RMB Holdings |
MultiChoice vs. E Media Holdings | MultiChoice vs. eMedia Holdings Limited | MultiChoice vs. We Buy Cars | MultiChoice vs. Argent |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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