Correlation Between Arrowhead Properties and Nampak

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

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

Diversification Opportunities for Arrowhead Properties and Nampak

0.0

Correlation Coefficient

Arrowhead Properties  Nampak

Pay attention - limited upside

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

Pair Corralation between Arrowhead Properties and Nampak

If you would invest  4,100,000  in Nampak on December 29, 2024 and sell it today you would earn a total of  21,600  from holding Nampak or generate 0.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Arrowhead Properties Ltd  vs.  Nampak

Arrowhead Properties

Risk-Adjusted Performance

Very Weak

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

Nampak

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Nampak are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Nampak is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Arrowhead Properties and Nampak

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

The idea behind Arrowhead Properties Ltd and Nampak 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.