Correlation Between AIRTEL UGANDA and EAST AFRICAN
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By analyzing existing cross correlation between AIRTEL UGANDA LIMITED and EAST AFRICAN BREWERIES, you can compare the effects of market volatilities on AIRTEL UGANDA and EAST AFRICAN 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 UGANDA with a short position of EAST AFRICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIRTEL UGANDA and EAST AFRICAN.
Diversification Opportunities for AIRTEL UGANDA and EAST AFRICAN
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIRTEL and EAST is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding AIRTEL UGANDA LIMITED and EAST AFRICAN BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST AFRICAN BREWERIES and AIRTEL UGANDA 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 UGANDA LIMITED are associated (or correlated) with EAST AFRICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST AFRICAN BREWERIES has no effect on the direction of AIRTEL UGANDA i.e., AIRTEL UGANDA and EAST AFRICAN go up and down completely randomly.
Pair Corralation between AIRTEL UGANDA and EAST AFRICAN
Assuming the 90 days trading horizon AIRTEL UGANDA LIMITED is expected to under-perform the EAST AFRICAN. But the stock apears to be less risky and, when comparing its historical volatility, AIRTEL UGANDA LIMITED is 3.12 times less risky than EAST AFRICAN. The stock trades about -0.14 of its potential returns per unit of risk. The EAST AFRICAN BREWERIES is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 438,824 in EAST AFRICAN BREWERIES on August 31, 2024 and sell it today you would earn a total of 72,482 from holding EAST AFRICAN BREWERIES or generate 16.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIRTEL UGANDA LIMITED vs. EAST AFRICAN BREWERIES
Performance |
| Timeline |
| AIRTEL UGANDA LIMITED |
| EAST AFRICAN BREWERIES |
AIRTEL UGANDA and EAST AFRICAN Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIRTEL UGANDA and EAST AFRICAN
The main advantage of trading using opposite AIRTEL UGANDA and EAST AFRICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIRTEL UGANDA position performs unexpectedly, EAST AFRICAN 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 EAST AFRICAN will offset losses from the drop in EAST AFRICAN's long position.| AIRTEL UGANDA vs. CENTUM INVESTMENT PANY | AIRTEL UGANDA vs. EAST AFRICAN BREWERIES | AIRTEL UGANDA vs. NATION MEDIA GROUP | AIRTEL UGANDA vs. QUALITY CHEMICAL INDUSTRIES |
| EAST AFRICAN vs. BANK OF BARODA | EAST AFRICAN vs. CENTUM INVESTMENT PANY | EAST AFRICAN vs. QUALITY CHEMICAL INDUSTRIES |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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