Correlation Between CA Sales and Impala Platinum

Can any of the company-specific risk be diversified away by investing in both CA Sales and Impala Platinum 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 CA Sales and Impala Platinum into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CA Sales Holdings and Impala Platinum Holdings, you can compare the effects of market volatilities on CA Sales and Impala Platinum 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 CA Sales with a short position of Impala Platinum. Check out your portfolio center. Please also check ongoing floating volatility patterns of CA Sales and Impala Platinum.

Diversification Opportunities for CA Sales and Impala Platinum

-0.4

Correlation Coefficient

CA Sales  Impala Platinum

Very good diversification

The 3 months correlation between CAA and Impala is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding CA Sales Holdings and Impala Platinum Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Impala Platinum Holdings and CA Sales 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 CA Sales Holdings are associated (or correlated) with Impala Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Impala Platinum Holdings has no effect on the direction of CA Sales i.e., CA Sales and Impala Platinum go up and down completely randomly.

Pair Corralation between CA Sales and Impala Platinum

Assuming the 90 days trading horizon CA Sales Holdings is expected to under-perform the Impala Platinum. In addition to that, CA Sales is 1.15 times more volatile than Impala Platinum Holdings. It trades about -0.11 of its total potential returns per unit of risk. Impala Platinum Holdings is currently generating about 0.11 per unit of volatility. If you would invest  933,000  in Impala Platinum Holdings on October 24, 2024 and sell it today you would earn a total of  48,900  from holding Impala Platinum Holdings or generate 5.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

CA Sales Holdings  vs.  Impala Platinum Holdings

CA Sales Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in CA Sales Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, CA Sales is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Impala Platinum Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Impala Platinum Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with CA Sales and Impala Platinum

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

The idea behind CA Sales Holdings and Impala Platinum Holdings 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.

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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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.