Correlation Between Bushveld Minerals and Camping World

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Can any of the company-specific risk be diversified away by investing in both Bushveld Minerals and Camping World 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 Bushveld Minerals and Camping World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bushveld Minerals Limited and Camping World Holdings, you can compare the effects of market volatilities on Bushveld Minerals and Camping World 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 Bushveld Minerals with a short position of Camping World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bushveld Minerals and Camping World.

Diversification Opportunities for Bushveld Minerals and Camping World

-0.14
  Correlation Coefficient

Good diversification

The 3 months correlation between Bushveld and Camping is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Bushveld Minerals Limited and Camping World Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Camping World Holdings and Bushveld Minerals 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 Bushveld Minerals Limited are associated (or correlated) with Camping World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Camping World Holdings has no effect on the direction of Bushveld Minerals i.e., Bushveld Minerals and Camping World go up and down completely randomly.

Pair Corralation between Bushveld Minerals and Camping World

Assuming the 90 days horizon Bushveld Minerals Limited is expected to generate 6.18 times more return on investment than Camping World. However, Bushveld Minerals is 6.18 times more volatile than Camping World Holdings. It trades about 0.03 of its potential returns per unit of risk. Camping World Holdings is currently generating about 0.06 per unit of risk. If you would invest  12.00  in Bushveld Minerals Limited on September 2, 2022 and sell it today you would lose (3.00)  from holding Bushveld Minerals Limited or give up 25.0% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy97.67%
ValuesDaily Returns

Bushveld Minerals Limited  vs.  Camping World Holdings

 Performance (%) 
       Timeline  
Bushveld Minerals 
Bushveld Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Bushveld Minerals Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Bushveld Minerals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Bushveld Price Channel

Camping World Holdings 
Camping Performance
0 of 100
Over the last 90 days Camping World Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Camping World is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Camping Price Channel

Bushveld Minerals and Camping World Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bushveld Minerals and Camping World

The main advantage of trading using opposite Bushveld Minerals and Camping World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bushveld Minerals position performs unexpectedly, Camping World 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 Camping World will offset losses from the drop in Camping World's long position.
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The idea behind Bushveld Minerals Limited and Camping World 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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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 ETF Directory module to find actively traded Exchange Traded Funds (ETF) from around the world.

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