Correlation Between AIICO INSURANCE and AIRTEL AFRICA
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By analyzing existing cross correlation between AIICO INSURANCE PLC and AIRTEL AFRICA PLC, you can compare the effects of market volatilities on AIICO INSURANCE and AIRTEL 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 AIICO INSURANCE with a short position of AIRTEL AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIICO INSURANCE and AIRTEL AFRICA.
Diversification Opportunities for AIICO INSURANCE and AIRTEL AFRICA
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between AIICO and AIRTEL is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding AIICO INSURANCE PLC and AIRTEL AFRICA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRTEL AFRICA PLC and AIICO INSURANCE 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 AIICO INSURANCE PLC are associated (or correlated) with AIRTEL AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRTEL AFRICA PLC has no effect on the direction of AIICO INSURANCE i.e., AIICO INSURANCE and AIRTEL AFRICA go up and down completely randomly.
Pair Corralation between AIICO INSURANCE and AIRTEL AFRICA
Assuming the 90 days trading horizon AIICO INSURANCE PLC is expected to generate 1.9 times more return on investment than AIRTEL AFRICA. However, AIICO INSURANCE is 1.9 times more volatile than AIRTEL AFRICA PLC. It trades about 0.07 of its potential returns per unit of risk. AIRTEL AFRICA PLC is currently generating about 0.05 per unit of risk. If you would invest 54.00 in AIICO INSURANCE PLC on September 12, 2024 and sell it today you would earn a total of 68.00 from holding AIICO INSURANCE PLC or generate 125.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIICO INSURANCE PLC vs. AIRTEL AFRICA PLC
Performance |
| Timeline |
| AIICO INSURANCE PLC |
| AIRTEL AFRICA PLC |
AIICO INSURANCE and AIRTEL AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIICO INSURANCE and AIRTEL AFRICA
The main advantage of trading using opposite AIICO INSURANCE and AIRTEL AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIICO INSURANCE position performs unexpectedly, AIRTEL 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 AIRTEL AFRICA will offset losses from the drop in AIRTEL AFRICA's long position.| AIICO INSURANCE vs. CORNERSTONE INSURANCE PLC | AIICO INSURANCE vs. MULTI TREX INTEGRATED FOODS | AIICO INSURANCE vs. CHAMPION BREWERIES PLC | AIICO INSURANCE vs. STACO INSURANCE PLC |
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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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