Correlation Between Carsales and AFRICAN MEDIA

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

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

Diversification Opportunities for Carsales and AFRICAN MEDIA

0.0

Correlation Coefficient

Carsales  AFRICAN MEDIA

Pay attention - limited upside

The 3 months correlation between Carsales and AFRICAN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CarsalesCom and AFRICAN MEDIA ENT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFRICAN MEDIA ENT and Carsales 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 CarsalesCom are associated (or correlated) with AFRICAN MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFRICAN MEDIA ENT has no effect on the direction of Carsales i.e., Carsales and AFRICAN MEDIA go up and down completely randomly.

Pair Corralation between Carsales and AFRICAN MEDIA

If you would invest  1,920  in CarsalesCom on March 24, 2025 and sell it today you would earn a total of  100.00  from holding CarsalesCom or generate 5.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	98.41%
Values	Daily Returns

CarsalesCom  vs.  AFRICAN MEDIA ENT

CarsalesCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in CarsalesCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Carsales may actually be approaching a critical reversion point that can send shares even higher in July 2025.

AFRICAN MEDIA ENT

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFRICAN MEDIA ENT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, AFRICAN MEDIA is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Carsales and AFRICAN MEDIA

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

The idea behind CarsalesCom and AFRICAN MEDIA ENT 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..