Correlation Between Capitec Bank and Capitec Bank

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

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

Diversification Opportunities for Capitec Bank and Capitec Bank

-0.06

Correlation Coefficient

Capitec Bank  Capitec Bank

Good diversification

The 3 months correlation between Capitec and Capitec is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Capitec Bank Holdings and Capitec Bank Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Capitec Bank Holdings and Capitec Bank 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 Capitec Bank Holdings are associated (or correlated) with Capitec Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Capitec Bank Holdings has no effect on the direction of Capitec Bank i.e., Capitec Bank and Capitec Bank go up and down completely randomly.

Pair Corralation between Capitec Bank and Capitec Bank

Assuming the 90 days trading horizon Capitec Bank Holdings is expected to generate 0.83 times more return on investment than Capitec Bank. However, Capitec Bank Holdings is 1.21 times less risky than Capitec Bank. It trades about 0.18 of its potential returns per unit of risk. Capitec Bank Holdings is currently generating about 0.04 per unit of risk. If you would invest  29,869,200  in Capitec Bank Holdings on September 17, 2024 and sell it today you would earn a total of  3,419,900  from holding Capitec Bank Holdings or generate 11.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

Capitec Bank Holdings  vs.  Capitec Bank Holdings

Capitec Bank Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Capitec Bank Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Capitec Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Capitec Bank Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Capitec Bank Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Capitec Bank is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Capitec Bank and Capitec Bank

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

The idea behind Capitec Bank Holdings and Capitec Bank Holdings 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..