Correlation Between Wesizwe and Jubilee Platinum

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

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

Diversification Opportunities for Wesizwe and Jubilee Platinum

0.59

Correlation Coefficient

Wesizwe  Jubilee Platinum

Very weak diversification

The 3 months correlation between Wesizwe and Jubilee is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Wesizwe and Jubilee Platinum in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jubilee Platinum and Wesizwe 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 Wesizwe are associated (or correlated) with Jubilee Platinum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jubilee Platinum has no effect on the direction of Wesizwe i.e., Wesizwe and Jubilee Platinum go up and down completely randomly.

Pair Corralation between Wesizwe and Jubilee Platinum

Assuming the 90 days trading horizon Wesizwe is expected to under-perform the Jubilee Platinum. In addition to that, Wesizwe is 1.47 times more volatile than Jubilee Platinum. It trades about -0.12 of its total potential returns per unit of risk. Jubilee Platinum is currently generating about -0.11 per unit of volatility. If you would invest  10,500  in Jubilee Platinum on October 12, 2024 and sell it today you would lose (2,400) from holding Jubilee Platinum or give up 22.86% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.36%
Values	Daily Returns

Wesizwe  vs.  Jubilee Platinum

Wesizwe

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wesizwe 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.

Jubilee Platinum

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jubilee Platinum 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 Wesizwe and Jubilee Platinum

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

The idea behind Wesizwe and Jubilee Platinum 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.