Correlation Between AFRICAN DOMESTIC and LOTTOTECH
Can any of the company-specific risk be diversified away by investing in both AFRICAN DOMESTIC and LOTTOTECH 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 AFRICAN DOMESTIC and LOTTOTECH into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFRICAN DOMESTIC BOND and LOTTOTECH LTD, you can compare the effects of market volatilities on AFRICAN DOMESTIC and LOTTOTECH 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 AFRICAN DOMESTIC with a short position of LOTTOTECH. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFRICAN DOMESTIC and LOTTOTECH.
Diversification Opportunities for AFRICAN DOMESTIC and LOTTOTECH
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between AFRICAN and LOTTOTECH is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding AFRICAN DOMESTIC BOND and LOTTOTECH LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LOTTOTECH LTD and AFRICAN DOMESTIC 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 AFRICAN DOMESTIC BOND are associated (or correlated) with LOTTOTECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LOTTOTECH LTD has no effect on the direction of AFRICAN DOMESTIC i.e., AFRICAN DOMESTIC and LOTTOTECH go up and down completely randomly.
Pair Corralation between AFRICAN DOMESTIC and LOTTOTECH
Assuming the 90 days trading horizon AFRICAN DOMESTIC BOND is expected to generate 0.8 times more return on investment than LOTTOTECH. However, AFRICAN DOMESTIC BOND is 1.25 times less risky than LOTTOTECH. It trades about 0.0 of its potential returns per unit of risk. LOTTOTECH LTD is currently generating about -0.04 per unit of risk. If you would invest 668.00 in AFRICAN DOMESTIC BOND on October 25, 2024 and sell it today you would lose (34.00) from holding AFRICAN DOMESTIC BOND or give up 5.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFRICAN DOMESTIC BOND vs. LOTTOTECH LTD
Performance |
| Timeline |
| AFRICAN DOMESTIC BOND |
| LOTTOTECH LTD |
AFRICAN DOMESTIC and LOTTOTECH Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFRICAN DOMESTIC and LOTTOTECH
The main advantage of trading using opposite AFRICAN DOMESTIC and LOTTOTECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFRICAN DOMESTIC position performs unexpectedly, LOTTOTECH 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 LOTTOTECH will offset losses from the drop in LOTTOTECH's long position.| AFRICAN DOMESTIC vs. FINCORP INVESTMENT LTD | AFRICAN DOMESTIC vs. CONSTANCE HOTELS SERVICES | AFRICAN DOMESTIC vs. ABC BANKING PORATION | AFRICAN DOMESTIC vs. PHOENIX BEVERAGES LTD |
| LOTTOTECH vs. PHOENIX INVESTMENT PANY | LOTTOTECH vs. UNITED INVESTMENTS LTD | LOTTOTECH vs. BAYPORT MANAGEMENT LTD | LOTTOTECH vs. ASTORIA INVESTMENT LTD |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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