Correlation Between Workforce Holdings and Aveng
Can any of the company-specific risk be diversified away by investing in both Workforce Holdings and Aveng 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 Workforce Holdings and Aveng into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Workforce Holdings and Aveng, you can compare the effects of market volatilities on Workforce Holdings and Aveng 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 Workforce Holdings with a short position of Aveng. Check out your portfolio center. Please also check ongoing floating volatility patterns of Workforce Holdings and Aveng.
Diversification Opportunities for Workforce Holdings and Aveng
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Workforce and Aveng is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Workforce Holdings and Aveng in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aveng and Workforce Holdings 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 Workforce Holdings are associated (or correlated) with Aveng. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aveng has no effect on the direction of Workforce Holdings i.e., Workforce Holdings and Aveng go up and down completely randomly.
Pair Corralation between Workforce Holdings and Aveng
Assuming the 90 days trading horizon Workforce Holdings is expected to generate 1.42 times less return on investment than Aveng. In addition to that, Workforce Holdings is 1.37 times more volatile than Aveng. It trades about 0.08 of its total potential returns per unit of risk. Aveng is currently generating about 0.15 per unit of volatility. If you would invest 62,400 in Aveng on September 24, 2024 and sell it today you would earn a total of 53,400 from holding Aveng or generate 85.58% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 99.39% |
Values | Daily Returns |
Workforce Holdings vs. Aveng
Performance |
Timeline |
Workforce Holdings |
Aveng |
Workforce Holdings and Aveng Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Workforce Holdings and Aveng
The main advantage of trading using opposite Workforce Holdings and Aveng positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Workforce Holdings position performs unexpectedly, Aveng 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 Aveng will offset losses from the drop in Aveng's long position.Workforce Holdings vs. African Media Entertainment | Workforce Holdings vs. Hosken Consolidated Investments | Workforce Holdings vs. Astral Foods | Workforce Holdings vs. Bytes Technology |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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