Correlation Between Africa Oil and ISign Media
Can any of the company-specific risk be diversified away by investing in both Africa Oil and ISign Media 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 Africa Oil and ISign Media into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Africa Oil Corp and iSign Media Solutions, you can compare the effects of market volatilities on Africa Oil and ISign Media 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 Africa Oil with a short position of ISign Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Africa Oil and ISign Media.
Diversification Opportunities for Africa Oil and ISign Media
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Africa and ISign is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding Africa Oil Corp and iSign Media Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on iSign Media Solutions and Africa Oil 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 Africa Oil Corp are associated (or correlated) with ISign Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of iSign Media Solutions has no effect on the direction of Africa Oil i.e., Africa Oil and ISign Media go up and down completely randomly.
Pair Corralation between Africa Oil and ISign Media
Assuming the 90 days trading horizon Africa Oil Corp is expected to generate 2.68 times more return on investment than ISign Media. However, Africa Oil is 2.68 times more volatile than iSign Media Solutions. It trades about 0.17 of its potential returns per unit of risk. iSign Media Solutions is currently generating about -0.04 per unit of risk. If you would invest 178.00 in Africa Oil Corp on August 31, 2024 and sell it today you would earn a total of 18.00 from holding Africa Oil Corp or generate 10.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Africa Oil Corp vs. iSign Media Solutions
Performance |
| Timeline |
| Africa Oil Corp |
| iSign Media Solutions |
Africa Oil and ISign Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Africa Oil and ISign Media
The main advantage of trading using opposite Africa Oil and ISign Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Africa Oil position performs unexpectedly, ISign Media 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 ISign Media will offset losses from the drop in ISign Media's long position.| Africa Oil vs. Forum Energy Metals | Africa Oil vs. iShares Canadian HYBrid | Africa Oil vs. Brompton European Dividend | Africa Oil vs. Solar Alliance Energy |
| ISign Media vs. Mene Inc | ISign Media vs. Africa Oil Corp | ISign Media vs. Financial 15 Split | ISign Media vs. Rubicon Organics |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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