Correlation Between AECI MINING and PUMA ENERGY
Can any of the company-specific risk be diversified away by investing in both AECI MINING and PUMA ENERGY 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 AECI MINING and PUMA ENERGY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AECI MINING EXPLOSIVES and PUMA ENERGY ZAMBIA, you can compare the effects of market volatilities on AECI MINING and PUMA ENERGY 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 AECI MINING with a short position of PUMA ENERGY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AECI MINING and PUMA ENERGY.
Diversification Opportunities for AECI MINING and PUMA ENERGY
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between AECI and PUMA is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding AECI MINING EXPLOSIVES and PUMA ENERGY ZAMBIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PUMA ENERGY ZAMBIA and AECI MINING 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 AECI MINING EXPLOSIVES are associated (or correlated) with PUMA ENERGY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PUMA ENERGY ZAMBIA has no effect on the direction of AECI MINING i.e., AECI MINING and PUMA ENERGY go up and down completely randomly.
Pair Corralation between AECI MINING and PUMA ENERGY
Assuming the 90 days trading horizon AECI MINING EXPLOSIVES is expected to under-perform the PUMA ENERGY. In addition to that, AECI MINING is 1.73 times more volatile than PUMA ENERGY ZAMBIA. It trades about -0.22 of its total potential returns per unit of risk. PUMA ENERGY ZAMBIA is currently generating about 0.21 per unit of volatility. If you would invest 575.00 in PUMA ENERGY ZAMBIA on September 3, 2024 and sell it today you would earn a total of 5.00 from holding PUMA ENERGY ZAMBIA or generate 0.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
AECI MINING EXPLOSIVES vs. PUMA ENERGY ZAMBIA
Performance |
| Timeline |
| AECI MINING EXPLOSIVES |
| PUMA ENERGY ZAMBIA |
AECI MINING and PUMA ENERGY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AECI MINING and PUMA ENERGY
The main advantage of trading using opposite AECI MINING and PUMA ENERGY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AECI MINING position performs unexpectedly, PUMA ENERGY 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 PUMA ENERGY will offset losses from the drop in PUMA ENERGY's long position.| AECI MINING vs. STANDARD CHARTERED BANK | AECI MINING vs. ZAMBIAN BREWERIES PLC | AECI MINING vs. ZCCM INVESTMENT HOLDINGS | AECI MINING vs. CEC AFRICA INVESTMENTS |
| PUMA ENERGY vs. MADISON FINANCIAL SERVICES | PUMA ENERGY vs. AECI MINING EXPLOSIVES | PUMA ENERGY vs. BRITISH AMERICAN TOBACCO ZAMBIA | PUMA ENERGY vs. NATIONAL BREWERIES PLC |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume |