Correlation Between AFRICAN DISTILLERS and MEIKLES AFRICA
Can any of the company-specific risk be diversified away by investing in both AFRICAN DISTILLERS and MEIKLES AFRICA 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 DISTILLERS and MEIKLES AFRICA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFRICAN DISTILLERS LIMITED and MEIKLES AFRICA LIMITED, you can compare the effects of market volatilities on AFRICAN DISTILLERS and MEIKLES AFRICA 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 DISTILLERS with a short position of MEIKLES AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFRICAN DISTILLERS and MEIKLES AFRICA.
Diversification Opportunities for AFRICAN DISTILLERS and MEIKLES AFRICA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AFRICAN and MEIKLES is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AFRICAN DISTILLERS LIMITED and MEIKLES AFRICA LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MEIKLES AFRICA and AFRICAN DISTILLERS 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 DISTILLERS LIMITED are associated (or correlated) with MEIKLES AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MEIKLES AFRICA has no effect on the direction of AFRICAN DISTILLERS i.e., AFRICAN DISTILLERS and MEIKLES AFRICA go up and down completely randomly.
Pair Corralation between AFRICAN DISTILLERS and MEIKLES AFRICA
If you would invest 69,100 in AFRICAN DISTILLERS LIMITED on October 11, 2024 and sell it today you would earn a total of 900.00 from holding AFRICAN DISTILLERS LIMITED or generate 1.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
AFRICAN DISTILLERS LIMITED vs. MEIKLES AFRICA LIMITED
Performance |
| Timeline |
| AFRICAN DISTILLERS |
| MEIKLES AFRICA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
AFRICAN DISTILLERS and MEIKLES AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AFRICAN DISTILLERS and MEIKLES AFRICA
The main advantage of trading using opposite AFRICAN DISTILLERS and MEIKLES AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFRICAN DISTILLERS position performs unexpectedly, MEIKLES AFRICA 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 MEIKLES AFRICA will offset losses from the drop in MEIKLES AFRICA's long position.| AFRICAN DISTILLERS vs. BRITISH AMERICAN TOBACCO | AFRICAN DISTILLERS vs. TANGANDA TEA PANY | AFRICAN DISTILLERS vs. ZB FINANCIAL HOLDINGS | AFRICAN DISTILLERS vs. Cass Saddle Agriculture |
| MEIKLES AFRICA vs. STAR AFRICA PORATION | MEIKLES AFRICA vs. CAFCA LIMITED | MEIKLES AFRICA vs. FIRST MUTUAL PROPERTIES | MEIKLES AFRICA vs. AFRICAN DISTILLERS LIMITED |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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