Correlation Between E Media and Vukile Property

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

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

Diversification Opportunities for E Media and Vukile Property

0.2

Correlation Coefficient

E Media  Vukile Property

Modest diversification

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

Pair Corralation between E Media and Vukile Property

Assuming the 90 days trading horizon E Media Holdings is expected to under-perform the Vukile Property. In addition to that, E Media is 3.16 times more volatile than Vukile Property. It trades about 0.0 of its total potential returns per unit of risk. Vukile Property is currently generating about 0.05 per unit of volatility. If you would invest  177,100  in Vukile Property on September 3, 2024 and sell it today you would earn a total of  5,900  from holding Vukile Property or generate 3.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.44%
Values	Daily Returns

E Media Holdings  vs.  Vukile Property

E Media Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

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

Vukile Property

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Vukile Property are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound technical and fundamental indicators, Vukile Property is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with E Media and Vukile Property

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

The idea behind E Media Holdings and Vukile Property 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.

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 Global Correlations module to find global opportunities by holding instruments from different markets.