Correlation Between Naspers and Aveng
Can any of the company-specific risk be diversified away by investing in both Naspers and Aveng 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 Naspers and Aveng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naspers Limited and Aveng, you can compare the effects of market volatilities on Naspers and Aveng 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 Naspers with a short position of Aveng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naspers and Aveng.
Diversification Opportunities for Naspers and Aveng
Very weak diversification
The 3 months correlation between Naspers and Aveng is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Naspers Limited and Aveng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveng and Naspers 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 Naspers Limited are associated (or correlated) with Aveng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveng has no effect on the direction of Naspers i.e., Naspers and Aveng go up and down completely randomly.
Pair Corralation between Naspers and Aveng
Assuming the 90 days trading horizon Naspers Limited is expected to generate 0.69 times more return on investment than Aveng. However, Naspers Limited is 1.45 times less risky than Aveng. It trades about 0.04 of its potential returns per unit of risk. Aveng is currently generating about 0.0 per unit of risk. If you would invest 29,739,900 in Naspers Limited on September 23, 2024 and sell it today you would earn a total of 12,460,100 from holding Naspers Limited or generate 41.9% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Naspers Limited vs. Aveng
Performance |
Timeline |
Naspers Limited |
Aveng |
Naspers and Aveng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naspers and Aveng
The main advantage of trading using opposite Naspers and Aveng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naspers position performs unexpectedly, Aveng 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 Aveng will offset losses from the drop in Aveng's long position.Naspers vs. Prosus NV | Naspers vs. ABSA Bank Limited | Naspers vs. Dipula Income | Naspers vs. Pepkor Holdings |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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