Correlation Between African Media and Lighthouse Capital
Can any of the company-specific risk be diversified away by investing in both African Media and Lighthouse Capital 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 Media and Lighthouse Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between African Media Entertainment and Lighthouse Capital, you can compare the effects of market volatilities on African Media and Lighthouse Capital 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 Media with a short position of Lighthouse Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of African Media and Lighthouse Capital.
Diversification Opportunities for African Media and Lighthouse Capital
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between African and Lighthouse is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding African Media Entertainment and Lighthouse Capital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lighthouse Capital and African Media 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 Media Entertainment are associated (or correlated) with Lighthouse Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lighthouse Capital has no effect on the direction of African Media i.e., African Media and Lighthouse Capital go up and down completely randomly.
Pair Corralation between African Media and Lighthouse Capital
If you would invest 399,900 in African Media Entertainment on September 12, 2024 and sell it today you would earn a total of 10,100 from holding African Media Entertainment or generate 2.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 1.59% |
| Values | Daily Returns |
African Media Entertainment vs. Lighthouse Capital
Performance |
| Timeline |
| African Media Entert |
| Lighthouse Capital |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
African Media and Lighthouse Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with African Media and Lighthouse Capital
The main advantage of trading using opposite African Media and Lighthouse Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if African Media position performs unexpectedly, Lighthouse Capital 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 Lighthouse Capital will offset losses from the drop in Lighthouse Capital's long position.| African Media vs. Deneb Investments | African Media vs. HomeChoice Investments | African Media vs. British American Tobacco | African Media vs. Astoria Investments |
| Lighthouse Capital vs. AfroCentric Investment Corp | Lighthouse Capital vs. MC Mining | Lighthouse Capital vs. HomeChoice Investments | Lighthouse Capital vs. Safari Investments RSA |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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