Correlation Between Hosken Consolidated and Advtech
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Advtech 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 Hosken Consolidated and Advtech into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hosken Consolidated Investments and Advtech, you can compare the effects of market volatilities on Hosken Consolidated and Advtech 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 Hosken Consolidated with a short position of Advtech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Advtech.
Diversification Opportunities for Hosken Consolidated and Advtech
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Hosken and Advtech is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment and Advtech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advtech and Hosken Consolidated 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 Hosken Consolidated Investments are associated (or correlated) with Advtech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advtech has no effect on the direction of Hosken Consolidated i.e., Hosken Consolidated and Advtech go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Advtech
Assuming the 90 days trading horizon Hosken Consolidated Investments is expected to under-perform the Advtech. In addition to that, Hosken Consolidated is 1.39 times more volatile than Advtech. It trades about -0.55 of its total potential returns per unit of risk. Advtech is currently generating about 0.16 per unit of volatility. If you would invest 316,500 in Advtech on September 24, 2024 and sell it today you would earn a total of 11,200 from holding Advtech or generate 3.54% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Hosken Consolidated Investment vs. Advtech
Performance |
Timeline |
Hosken Consolidated |
Advtech |
Hosken Consolidated and Advtech Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Hosken Consolidated and Advtech
The main advantage of trading using opposite Hosken Consolidated and Advtech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated position performs unexpectedly, Advtech 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 Advtech will offset losses from the drop in Advtech's long position.Hosken Consolidated vs. Capitec Bank Holdings | Hosken Consolidated vs. RCL Foods | Hosken Consolidated vs. Frontier Transport Holdings | Hosken Consolidated vs. Lesaka Technologies |
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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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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