Correlation Between Capitec Bank and Raubex
Can any of the company-specific risk be diversified away by investing in both Capitec Bank and Raubex 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 Raubex 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 Raubex, you can compare the effects of market volatilities on Capitec Bank and Raubex 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 Raubex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capitec Bank and Raubex.
Diversification Opportunities for Capitec Bank and Raubex
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Capitec and Raubex is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Raubex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Raubex 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 Raubex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Raubex has no effect on the direction of Capitec Bank i.e., Capitec Bank and Raubex go up and down completely randomly.
Pair Corralation between Capitec Bank and Raubex
Assuming the 90 days trading horizon Capitec Bank is expected to generate 1.32 times less return on investment than Raubex. But when comparing it to its historical volatility, Capitec Bank Holdings is 1.61 times less risky than Raubex. It trades about 0.08 of its potential returns per unit of risk. Raubex is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 269,508 in Raubex on September 23, 2024 and sell it today you would earn a total of 256,092 from holding Raubex or generate 95.02% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Capitec Bank Holdings vs. Raubex
Performance |
Timeline |
Capitec Bank Holdings |
Raubex |
Capitec Bank and Raubex Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Capitec Bank and Raubex
The main advantage of trading using opposite Capitec Bank and Raubex positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capitec Bank position performs unexpectedly, Raubex 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 Raubex will offset losses from the drop in Raubex's long position.Capitec Bank vs. Safari Investments RSA | Capitec Bank vs. Astral Foods | Capitec Bank vs. City Lodge Hotels | Capitec Bank vs. CA Sales 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
Share Portfolio Track or share privately all of your investments from the convenience of any device | |
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
Global Correlations Find global opportunities by holding instruments from different markets | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |