Correlation Between SHOPRITE HLDG and SHOPRITE HDGS

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

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

Diversification Opportunities for SHOPRITE HLDG and SHOPRITE HDGS

0.0

Correlation Coefficient

SHOPRITE HLDG  SHOPRITE HDGS

Pay attention - limited upside

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

Pair Corralation between SHOPRITE HLDG and SHOPRITE HDGS

If you would invest  1,420  in SHOPRITE HDGS ADR on October 22, 2024 and sell it today you would earn a total of  20.00  from holding SHOPRITE HDGS ADR or generate 1.41% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.67%
Values	Daily Returns

SHOPRITE HLDG  vs.  SHOPRITE HDGS ADR

SHOPRITE HLDG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SHOPRITE HLDG has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, SHOPRITE HLDG is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

SHOPRITE HDGS ADR

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in SHOPRITE HDGS ADR are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, SHOPRITE HDGS is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SHOPRITE HLDG and SHOPRITE HDGS

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

The idea behind SHOPRITE HLDG and SHOPRITE HDGS ADR 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 Stocks Directory module to find actively traded stocks across global markets.