Correlation Between ESGL Holdings and CAMDEN

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

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

Diversification Opportunities for ESGL Holdings and CAMDEN

-0.58

Correlation Coefficient

ESGL Holdings  CAMDEN

Excellent diversification

The 3 months correlation between ESGL and CAMDEN is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding ESGL Holdings Limited and CAMDEN PPTY TR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAMDEN PPTY TR and ESGL Holdings 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 ESGL Holdings Limited are associated (or correlated) with CAMDEN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAMDEN PPTY TR has no effect on the direction of ESGL Holdings i.e., ESGL Holdings and CAMDEN go up and down completely randomly.

Pair Corralation between ESGL Holdings and CAMDEN

Assuming the 90 days horizon ESGL Holdings Limited is expected to generate 19.77 times more return on investment than CAMDEN. However, ESGL Holdings is 19.77 times more volatile than CAMDEN PPTY TR. It trades about 0.12 of its potential returns per unit of risk. CAMDEN PPTY TR is currently generating about -0.21 per unit of risk. If you would invest  1.10  in ESGL Holdings Limited on September 25, 2024 and sell it today you would earn a total of  0.50  from holding ESGL Holdings Limited or generate 45.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	98.08%
Values	Daily Returns

ESGL Holdings Limited  vs.  CAMDEN PPTY TR

ESGL Holdings Limited

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ESGL Holdings Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile essential indicators, ESGL Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

CAMDEN PPTY TR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days CAMDEN PPTY TR has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for CAMDEN PPTY TR investors.

Pair Trading with ESGL Holdings and CAMDEN

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

The idea behind ESGL Holdings Limited and CAMDEN PPTY TR 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.