Correlation Between Tinybeans Group and Naspers

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

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

Diversification Opportunities for Tinybeans Group and Naspers

0.2

Correlation Coefficient

Tinybeans Group  Naspers

Modest diversification

The 3 months correlation between Tinybeans and Naspers is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Tinybeans Group Limited and Naspers Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Naspers Limited and Tinybeans Group 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 Tinybeans Group Limited are associated (or correlated) with Naspers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Naspers Limited has no effect on the direction of Tinybeans Group i.e., Tinybeans Group and Naspers go up and down completely randomly.

Pair Corralation between Tinybeans Group and Naspers

Assuming the 90 days horizon Tinybeans Group Limited is expected to under-perform the Naspers. In addition to that, Tinybeans Group is 1.27 times more volatile than Naspers Limited. It trades about -0.22 of its total potential returns per unit of risk. Naspers Limited is currently generating about 0.09 per unit of volatility. If you would invest  20,860  in Naspers Limited on December 3, 2024 and sell it today you would earn a total of  2,734  from holding Naspers Limited or generate 13.11% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	92.68%
Values	Daily Returns

Tinybeans Group Limited  vs.  Naspers Limited

Tinybeans Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Tinybeans Group Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Naspers Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Naspers Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Naspers is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Tinybeans Group and Naspers

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

The idea behind Tinybeans Group Limited and Naspers 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.