Correlation Between Naspers and Gemfields
Can any of the company-specific risk be diversified away by investing in both Naspers and Gemfields 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 Gemfields into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naspers Limited and Gemfields Group, you can compare the effects of market volatilities on Naspers and Gemfields 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 Gemfields. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naspers and Gemfields.
Diversification Opportunities for Naspers and Gemfields
Very good diversification
The 3 months correlation between Naspers and Gemfields is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Naspers Limited and Gemfields Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gemfields Group 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 Gemfields. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gemfields Group has no effect on the direction of Naspers i.e., Naspers and Gemfields go up and down completely randomly.
Pair Corralation between Naspers and Gemfields
Assuming the 90 days trading horizon Naspers Limited is expected to generate 0.24 times more return on investment than Gemfields. However, Naspers Limited is 4.17 times less risky than Gemfields. It trades about 0.12 of its potential returns per unit of risk. Gemfields Group is currently generating about -0.15 per unit of risk. If you would invest 40,765,200 in Naspers Limited on September 24, 2024 and sell it today you would earn a total of 1,434,800 from holding Naspers Limited or generate 3.52% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Naspers Limited vs. Gemfields Group
Performance |
Timeline |
Naspers Limited |
Gemfields Group |
Naspers and Gemfields Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naspers and Gemfields
The main advantage of trading using opposite Naspers and Gemfields positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naspers position performs unexpectedly, Gemfields 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 Gemfields will offset losses from the drop in Gemfields' long position.Naspers vs. Prosus NV | Naspers vs. ABSA Bank Limited | Naspers vs. Dipula Income | Naspers vs. Pepkor Holdings |
Gemfields vs. Impala Platinum Holdings | Gemfields vs. Sasol Ltd Bee | Gemfields vs. Growthpoint Properties | Gemfields vs. AfricaRhodium ETF |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Analyst Advice Analyst recommendations and target price estimates broken down by several categories |