Correlation Between AIRTEL AFRICA and STERLING FINANCIAL
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By analyzing existing cross correlation between AIRTEL AFRICA PLC and STERLING FINANCIAL HOLDINGS, you can compare the effects of market volatilities on AIRTEL AFRICA and STERLING FINANCIAL 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 AIRTEL AFRICA with a short position of STERLING FINANCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIRTEL AFRICA and STERLING FINANCIAL.
Diversification Opportunities for AIRTEL AFRICA and STERLING FINANCIAL
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between AIRTEL and STERLING is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding AIRTEL AFRICA PLC and STERLING FINANCIAL HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STERLING FINANCIAL and AIRTEL AFRICA 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 AIRTEL AFRICA PLC are associated (or correlated) with STERLING FINANCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STERLING FINANCIAL has no effect on the direction of AIRTEL AFRICA i.e., AIRTEL AFRICA and STERLING FINANCIAL go up and down completely randomly.
Pair Corralation between AIRTEL AFRICA and STERLING FINANCIAL
Assuming the 90 days trading horizon AIRTEL AFRICA PLC is expected to generate 0.21 times more return on investment than STERLING FINANCIAL. However, AIRTEL AFRICA PLC is 4.87 times less risky than STERLING FINANCIAL. It trades about -0.22 of its potential returns per unit of risk. STERLING FINANCIAL HOLDINGS is currently generating about -0.07 per unit of risk. If you would invest 220,000 in AIRTEL AFRICA PLC on September 4, 2024 and sell it today you would lose (4,310) from holding AIRTEL AFRICA PLC or give up 1.96% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
AIRTEL AFRICA PLC vs. STERLING FINANCIAL HOLDINGS
Performance |
| Timeline |
| AIRTEL AFRICA PLC |
| STERLING FINANCIAL |
AIRTEL AFRICA and STERLING FINANCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIRTEL AFRICA and STERLING FINANCIAL
The main advantage of trading using opposite AIRTEL AFRICA and STERLING FINANCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIRTEL AFRICA position performs unexpectedly, STERLING FINANCIAL 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 STERLING FINANCIAL will offset losses from the drop in STERLING FINANCIAL's long position.| AIRTEL AFRICA vs. GUINEA INSURANCE PLC | AIRTEL AFRICA vs. SECURE ELECTRONIC TECHNOLOGY | AIRTEL AFRICA vs. VFD GROUP | AIRTEL AFRICA vs. VETIVA S P |
| STERLING FINANCIAL vs. GUINEA INSURANCE PLC | STERLING FINANCIAL vs. SECURE ELECTRONIC TECHNOLOGY | STERLING FINANCIAL vs. VFD GROUP | STERLING FINANCIAL vs. VETIVA S P |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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