Correlation Between Capitec Bank and Granprade

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

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

Diversification Opportunities for Capitec Bank and Granprade

0.0

Correlation Coefficient

Capitec Bank  Granprade

Pay attention - limited upside

The 3 months correlation between Capitec and Granprade is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Granprade in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Granprade and Capitec Bank 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 Capitec Bank Holdings are associated (or correlated) with Granprade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Granprade has no effect on the direction of Capitec Bank i.e., Capitec Bank and Granprade go up and down completely randomly.

Pair Corralation between Capitec Bank and Granprade

If you would invest  31,299,100  in Capitec Bank Holdings on December 29, 2024 and sell it today you would lose (26,200) from holding Capitec Bank Holdings or give up 0.08% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

Capitec Bank Holdings  vs.  Granprade

Capitec Bank Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Capitec Bank Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Capitec Bank is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Granprade

Risk-Adjusted Performance

Very Weak

Over the last 90 days Granprade has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Granprade is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Capitec Bank and Granprade

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

The idea behind Capitec Bank Holdings and Granprade 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..