Correlation Between Naspers and AfroCentric Investment
Can any of the company-specific risk be diversified away by investing in both Naspers and AfroCentric Investment 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 Naspers and AfroCentric Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Naspers Limited and AfroCentric Investment Corp, you can compare the effects of market volatilities on Naspers and AfroCentric Investment 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 Naspers with a short position of AfroCentric Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Naspers and AfroCentric Investment.
Diversification Opportunities for Naspers and AfroCentric Investment
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Naspers and AfroCentric is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Naspers Limited and AfroCentric Investment Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AfroCentric Investment and Naspers 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 Naspers Limited are associated (or correlated) with AfroCentric Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AfroCentric Investment has no effect on the direction of Naspers i.e., Naspers and AfroCentric Investment go up and down completely randomly.
Pair Corralation between Naspers and AfroCentric Investment
Assuming the 90 days trading horizon Naspers Limited is expected to generate 0.38 times more return on investment than AfroCentric Investment. However, Naspers Limited is 2.6 times less risky than AfroCentric Investment. It trades about 0.2 of its potential returns per unit of risk. AfroCentric Investment Corp is currently generating about -0.09 per unit of risk. If you would invest 34,991,300 in Naspers Limited on September 13, 2024 and sell it today you would earn a total of 8,614,800 from holding Naspers Limited or generate 24.62% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Naspers Limited vs. AfroCentric Investment Corp
Performance |
Timeline |
Naspers Limited |
AfroCentric Investment |
Naspers and AfroCentric Investment Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Naspers and AfroCentric Investment
The main advantage of trading using opposite Naspers and AfroCentric Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Naspers position performs unexpectedly, AfroCentric Investment 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 AfroCentric Investment will offset losses from the drop in AfroCentric Investment's long position.Naspers vs. Safari Investments RSA | Naspers vs. Harmony Gold Mining | Naspers vs. We Buy Cars | Naspers vs. Lesaka Technologies |
AfroCentric Investment vs. Life Healthcare | AfroCentric Investment vs. Sasol Ltd Bee | AfroCentric Investment vs. Centaur Bci Balanced | AfroCentric Investment vs. Growthpoint Properties |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
Other Complementary Tools
Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
Stocks Directory Find actively traded stocks across global markets |