Thursday, 30 June 2011 - 20:00
Sharenet is pleased to announce the launch of our new publication, The Sharenet Daily. We have built on the success of our Daily Equity Report, while adding more content and helpful information. The result is a publication that gives readers a quick, easy to read and informative synopsis of market activity, company results and news on the JSE for the day, as well as an overview of what transpired on important overseas markets.
The Sharenet Daily includes helpful charts that give a graphical impression of events, and our news content is sourced from a number of contributors, including Reuters. In addition, Sharenet's popular price information is available in our Spot Price format which provides a snapshot of the JSE and world indices, currencies and commodities.
All the JSE trading statistics; major movers; latest dividends; upcoming AGM dates and more are provided to insure that you keep abreast of market developments. The Sharenet Daily is published at 8pm each day on the website and also distributed via email for your convenience. As always, we welcome your comments, feedback and suggestions at email@example.com
Lies, Damned Lies, and Statistics
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The investment world is a complicated environment. It is filled with professionals who have dedicated many years of their lives looking at and analysing numbers. While these professionals are able to analyse these numbers to come to conclusions, explaining the reasoning to someone who isn’t as versed in number crunching can prove quite difficult.
As such there are numerous ratios and statistics that have been developed over the years to help investors reach conclusions from reams of data (read numbers - returns). Unfortunately incorrect conclusions are sometimes inferred from these statistics, which leads to poor decision making.
Today we’ll take a look at the difference between correlation and return profile. Often investors assume that assets with a high correlation will have a similar return profile and vice versa. While this can happen, it’s not always the case!
Below is a chart of the performance of the ALSI and Gold (both in ZAR) over the past 10 years. It is evident that their returns are almost identical, their monthly correlation, however, is only 5%!
You will notice that although gold and ALSI often move in different directions over the past 10 years they have both delivered excellent real returns.
The next two charts compare the MSCI World with the MSCI Emerging Market. The first chart is one that we often see, with the MSCI Emerging Market thoroughly outperforming the MSCI World. With this type of return profile most investors would assume they have a low correlation, but this couldn’t be further from the truth! Over the past 10 years there has been a correlation of over 90% between these two indices. Having a look at the second chart of the two we can see why this case. Here we’ve put the two indices on different axes and we can see that the direction of their returns are very similar (what correlation measures), but the final result is very different.
An important point is that correlation is not necessarily the same as return profile, and extending this further is to be wary of any conclusions drawn from methods that you don’t understand.
While correlation is a tool that we look at in an attempt to smooth returns, we believe that it is more important to get a variety of return drivers together when constructing a portfolio. In many cases assets with different returns drivers will have a low correlation, but you won’t find us excluding assets purely because they have a high correlation.
The investor who excluded emerging market assets from his portfolio over the last decade on the basis of them having a high correlation with developed markets wouldn’t be a happy investor!
021 9144 966
Thu, 30 Jun 2011
World Markets (Spot Prices)
|JSE Top 40||17:05||28551.82||123.10||0.43%|
|JSE Indust 25||17:00||27749.40||171.40||0.62%|
|Rand / Dollar||19:59||6.7617||-0.0292||-0.43%|
|Rand / Pound||19:59||10.8363||-0.0568||-0.52%|
|Rand / Euro||19:59||9.8167||-0.0028||-0.03%|
|Rand / NZD||19:58||5.5923||-0.0121||-0.22%|
|Rand / AUD||19:59||7.2498||-0.0153||-0.21%|
|Yen / Dollar||19:58||80.5900||-0.1900||-0.24%|
|Euro / Dollar||19:59||0.6885||-0.0040||-0.58%|
|Dollar / Euro||19:59||1.4517||0.0085||0.59%|
|Pound / Dollar||19:59||0.6219||-0.0004||-0.06%|
Click here for the Sharenet Spot Price page
The JSE Today
|Index Name||RP||Move||% Move|
|Financial & Ind. 30||30,834.03||154.38||0.50%|
|Oil & Gas ||26,953.81||225.69||0.84%|
|Oil & Gas Producers ||14,492.57||121.35||0.84%|
|Basic Materials ||29,993.47||95.51||0.32%|
|Forestry & Paper ||14,538.40||159.90||1.11%|
|Industrial Metals ||29,918.25||166.65||0.56%|
|General Industrials ||76,270.71||169.91||0.22%|
|Consumer Goods ||27,327.00||36.12||0.13%|
|Automobiles & Parts ||3,441.98||45.29||1.33%|
|Health Care ||33,340.56||30.13||0.09%|
|Food Producers ||47,746.10||152.12||0.32%|
|Index Name||RP||Move||% Move|
|Personal Goods ||440.15||-4.20||-0.95%|
|Consumer Services ||53,528.23||697.80||1.32%|
|General Retailers ||41,831.06||617.49||1.50%|
|Travel & Leisure ||3,741.30||7.26||0.19%|
|Support Services ||2,442.25||8.37||0.34%|
|Non-life Insurance ||31,766.31||.00||0.00%|
|Life Insurance ||15,878.91||72.11||0.46%|
|General Financial ||2,266.77||14.52||0.64%|
|SHARIAH TOP40 ||3,154.77||13||0.41%|
|FTSE/JSE SHARIAH ALL||3,218.10||13||0.40%|
|FTSE JSE Fledgling ||4,554.14||50||1.11%|
|FTSE/JSE Alt X ||1,069.65||-0||-0.05%|
|SA LISTED PROPERTY ||381.55||-0.20%|
|CAPPED PROPERTY ||316.83||-0.16%|
|FTSE/JSE RAFI 40||6,647.23||31||0.48%|
|Capped Top 40||14,892.37||63||0.42%|
|Capped All Share||16,053.52||70||0.44%|
Click here for the Sharenet Index Summary page
Latest Consensus Changes**
|NED||NEDBANK GROUP LTD||SELL||28 Jun|
|SBK||STANDARD BANK GROUP LIMIT...||SELL||28 Jun|
|AIP||ADCOCK INGRAM HLGS LD||HOLD||28 Jun|
|LHC||LIFE HEALTHCARE GRP HLDG ...||BUY||28 Jun|
|EQS||EQSTRA HOLDINGS LTD||HOLD||28 Jun||
|Expected||Company Name||Fin. Date|
|01 Jul 2011||AH-VEST||March 2011 (Final)|
|01 Jul 2011||BEIGE||March 2011 (Final)|
|01 Jul 2011||BEIGEP||March 2011 (Final)|
|01 Jul 2011||BEIGEPREF2||March 2011 (Final)|
|ALTRON PP||11-05-04||11-06-24||11-07-04||R 1.0800|
|MZR||Mazor Group Ltd||30/06/2011||Confirmed|
|MOB||Mobile Industries Ltd||30/06/2011||Confirmed|
|RBA||RBA Holdings Ltd||30/06/2011||Confirmed||
Stock Exchange News Service
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