Correlation Between Hosken Consolidated and Pepkor Holdings

Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated and Pepkor Holdings 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 Pepkor Holdings 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 Pepkor Holdings, you can compare the effects of market volatilities on Hosken Consolidated and Pepkor Holdings 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 Pepkor Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Pepkor Holdings.

Diversification Opportunities for Hosken Consolidated and Pepkor Holdings

0.0

Correlation Coefficient

Hosken Consolidated  Pepkor Holdings

Pay attention - limited upside

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

Pair Corralation between Hosken Consolidated and Pepkor Holdings

If you would invest (100.00) in Pepkor Holdings on October 23, 2024 and sell it today you would earn a total of  100.00  from holding Pepkor Holdings or generate -100.0% return on investment over 90 days.

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

Hosken Consolidated Investment  vs.  Pepkor Holdings

Hosken Consolidated

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Hosken Consolidated Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pepkor Holdings

Risk-Adjusted Performance

0 of 100

Solid

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

Pair Trading with Hosken Consolidated and Pepkor Holdings

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

The idea behind Hosken Consolidated Investments and Pepkor Holdings 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.