Correlation Between Tiger Brands and Brimstone Investment
Can any of the company-specific risk be diversified away by investing in both Tiger Brands and Brimstone Investment 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 Tiger Brands and Brimstone Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tiger Brands and Brimstone Investment, you can compare the effects of market volatilities on Tiger Brands and Brimstone Investment 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 Tiger Brands with a short position of Brimstone Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tiger Brands and Brimstone Investment.
Diversification Opportunities for Tiger Brands and Brimstone Investment
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Tiger and Brimstone is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Tiger Brands and Brimstone Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Brimstone Investment and Tiger Brands 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 Tiger Brands are associated (or correlated) with Brimstone Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Brimstone Investment has no effect on the direction of Tiger Brands i.e., Tiger Brands and Brimstone Investment go up and down completely randomly.
Pair Corralation between Tiger Brands and Brimstone Investment
Assuming the 90 days trading horizon Tiger Brands is expected to generate 0.3 times more return on investment than Brimstone Investment. However, Tiger Brands is 3.3 times less risky than Brimstone Investment. It trades about 0.68 of its potential returns per unit of risk. Brimstone Investment is currently generating about 0.05 per unit of risk. If you would invest 2,459,600 in Tiger Brands on September 24, 2024 and sell it today you would earn a total of 484,300 from holding Tiger Brands or generate 19.69% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 95.0% |
Values | Daily Returns |
Tiger Brands vs. Brimstone Investment
Performance |
Timeline |
Tiger Brands |
Brimstone Investment |
Tiger Brands and Brimstone Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Tiger Brands and Brimstone Investment
The main advantage of trading using opposite Tiger Brands and Brimstone Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tiger Brands position performs unexpectedly, Brimstone Investment 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 Brimstone Investment will offset losses from the drop in Brimstone Investment's long position.Tiger Brands vs. Avi | Tiger Brands vs. RCL Foods | Tiger Brands vs. Oceana | Tiger Brands vs. Libstar Holdings |
Brimstone Investment vs. Tiger Brands | Brimstone Investment vs. Avi | Brimstone Investment vs. RCL Foods | Brimstone Investment vs. Oceana |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
Other Complementary Tools
Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities | |
Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital |