Correlation Between AFREXIMBANK and PLASTIC INDUSTRY
Can any of the company-specific risk be diversified away by investing in both AFREXIMBANK and PLASTIC INDUSTRY 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 AFREXIMBANK and PLASTIC INDUSTRY into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFREXIMBANK and PLASTIC INDUSTRY LTD, you can compare the effects of market volatilities on AFREXIMBANK and PLASTIC INDUSTRY 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 AFREXIMBANK with a short position of PLASTIC INDUSTRY. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFREXIMBANK and PLASTIC INDUSTRY.
Diversification Opportunities for AFREXIMBANK and PLASTIC INDUSTRY
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AFREXIMBANK and PLASTIC is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding AFREXIMBANK and PLASTIC INDUSTRY LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PLASTIC INDUSTRY LTD and AFREXIMBANK 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 AFREXIMBANK are associated (or correlated) with PLASTIC INDUSTRY. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PLASTIC INDUSTRY LTD has no effect on the direction of AFREXIMBANK i.e., AFREXIMBANK and PLASTIC INDUSTRY go up and down completely randomly.
Pair Corralation between AFREXIMBANK and PLASTIC INDUSTRY
Assuming the 90 days trading horizon AFREXIMBANK is expected to generate 89.58 times less return on investment than PLASTIC INDUSTRY. But when comparing it to its historical volatility, AFREXIMBANK is 2.2 times less risky than PLASTIC INDUSTRY. It trades about 0.0 of its potential returns per unit of risk. PLASTIC INDUSTRY LTD is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 4,395 in PLASTIC INDUSTRY LTD on November 4, 2024 and sell it today you would earn a total of 95.00 from holding PLASTIC INDUSTRY LTD or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AFREXIMBANK vs. PLASTIC INDUSTRY LTD
Performance |
| Timeline |
| AFREXIMBANK |
| PLASTIC INDUSTRY LTD |
AFREXIMBANK and PLASTIC INDUSTRY Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFREXIMBANK and PLASTIC INDUSTRY
The main advantage of trading using opposite AFREXIMBANK and PLASTIC INDUSTRY positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFREXIMBANK position performs unexpectedly, PLASTIC INDUSTRY 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 PLASTIC INDUSTRY will offset losses from the drop in PLASTIC INDUSTRY's long position.| AFREXIMBANK vs. FINCORP INVESTMENT LTD | AFREXIMBANK vs. MCB GROUP LIMITED | AFREXIMBANK vs. MCB GROUP LTD | AFREXIMBANK vs. LOTTOTECH LTD |
| PLASTIC INDUSTRY vs. BEAU VALLON HOSPITAL | PLASTIC INDUSTRY vs. CONSTANCE HOTELS SERVICES | PLASTIC INDUSTRY vs. NATIONAL INVESTMENT TRUST | PLASTIC INDUSTRY vs. MAURITIUS CHEMICAL FERTILIZER |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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