Correlation Between Pepkor Holdings and Sun International

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

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

Diversification Opportunities for Pepkor Holdings and Sun International

0.0

Correlation Coefficient

Pepkor Holdings  Sun International

Pay attention - limited upside

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

Pair Corralation between Pepkor Holdings and Sun International

If you would invest  286,400  in Pepkor Holdings on October 8, 2024 and sell it today you would earn a total of  2,000  from holding Pepkor Holdings or generate 0.7% return on investment over 90 days.

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

Pepkor Holdings  vs.  Sun International

Pepkor Holdings

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Pepkor Holdings are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Pepkor Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Sun International

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Pepkor Holdings and Sun International

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

The idea behind Pepkor Holdings and Sun International 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.