Correlation Between African Discovery and Emeco Holdings
Can any of the company-specific risk be diversified away by investing in both African Discovery and Emeco Holdings 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 Discovery and Emeco Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between African Discovery Group and Emeco Holdings Limited, you can compare the effects of market volatilities on African Discovery and Emeco Holdings 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 Discovery with a short position of Emeco Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Discovery and Emeco Holdings.
Diversification Opportunities for African Discovery and Emeco Holdings
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between African and Emeco is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding African Discovery Group and Emeco Holdings Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emeco Holdings and African Discovery 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 Discovery Group are associated (or correlated) with Emeco Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emeco Holdings has no effect on the direction of African Discovery i.e., African Discovery and Emeco Holdings go up and down completely randomly.
Pair Corralation between African Discovery and Emeco Holdings
If you would invest 49.00 in Emeco Holdings Limited on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Emeco Holdings Limited or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
African Discovery Group vs. Emeco Holdings Limited
Performance |
| Timeline |
| African Discovery |
| Emeco Holdings |
African Discovery and Emeco Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Discovery and Emeco Holdings
The main advantage of trading using opposite African Discovery and Emeco Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Discovery position performs unexpectedly, Emeco Holdings 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 Emeco Holdings will offset losses from the drop in Emeco Holdings' long position.| African Discovery vs. United Rentals | African Discovery vs. Ashtead Group plc | African Discovery vs. AerCap Holdings NV | African Discovery vs. Fortress Transp Infra |
| Emeco Holdings vs. United Rentals | Emeco Holdings vs. Ashtead Group plc | Emeco Holdings vs. AerCap Holdings NV | Emeco Holdings vs. Fortress Transp Infra |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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