Correlation Between Thungela Resources and AH Vest

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

By analyzing existing cross correlation between Thungela Resources Limited and AH Vest Limited, you can compare the effects of market volatilities on Thungela Resources and AH Vest 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 Thungela Resources with a short position of AH Vest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thungela Resources and AH Vest.

Diversification Opportunities for Thungela Resources and AH Vest

0.5

Correlation Coefficient

Thungela Resources  AH Vest

Very weak diversification

The 3 months correlation between Thungela and AHL is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Thungela Resources Limited and AH Vest Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AH Vest Limited and Thungela Resources 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 Thungela Resources Limited are associated (or correlated) with AH Vest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AH Vest Limited has no effect on the direction of Thungela Resources i.e., Thungela Resources and AH Vest go up and down completely randomly.

Pair Corralation between Thungela Resources and AH Vest

If you would invest  1,313,954  in Thungela Resources Limited on October 10, 2024 and sell it today you would earn a total of  10,446  from holding Thungela Resources Limited or generate 0.8% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	0.41%
Values	Daily Returns

Thungela Resources Limited  vs.  AH Vest Limited

Thungela Resources

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Thungela Resources Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Thungela Resources may actually be approaching a critical reversion point that can send shares even higher in February 2025.

AH Vest Limited

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days AH Vest Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather weak technical and fundamental indicators, AH Vest exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Thungela Resources and AH Vest

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

The idea behind Thungela Resources Limited and AH Vest Limited 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.