Correlation Between Thungela Resources and Redefine Properties

Can any of the company-specific risk be diversified away by investing in both Thungela Resources and Redefine Properties 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 Redefine Properties 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 Redefine Properties, you can compare the effects of market volatilities on Thungela Resources and Redefine Properties 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 Redefine Properties. Check out your portfolio center. Please also check ongoing floating volatility patterns of Thungela Resources and Redefine Properties.

Diversification Opportunities for Thungela Resources and Redefine Properties

0.0

Correlation Coefficient

Thungela Resources  Redefine Properties

Pay attention - limited upside

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

Pair Corralation between Thungela Resources and Redefine Properties

If you would invest (100.00) in Thungela Resources Limited on October 24, 2024 and sell it today you would earn a total of  100.00  from holding Thungela Resources Limited or generate -100.0% return on investment over 90 days.

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

Thungela Resources Limited  vs.  Redefine Properties

Thungela Resources

Risk-Adjusted Performance

0 of 100

Insignificant

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

Redefine Properties

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Redefine Properties has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Thungela Resources and Redefine Properties

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

The idea behind Thungela Resources Limited and Redefine Properties 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.