Correlation Between Advanced Info and Airtel Africa
Can any of the company-specific risk be diversified away by investing in both Advanced Info and Airtel Africa 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 Advanced Info and Airtel Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advanced Info Service and Airtel Africa Plc, you can compare the effects of market volatilities on Advanced Info 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 Advanced Info with a short position of Airtel Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advanced Info and Airtel Africa.
Diversification Opportunities for Advanced Info and Airtel Africa
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Advanced and Airtel is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Advanced Info Service 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 Advanced Info 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 Advanced Info Service 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 Advanced Info i.e., Advanced Info and Airtel Africa go up and down completely randomly.
Pair Corralation between Advanced Info and Airtel Africa
Assuming the 90 days horizon Advanced Info Service is expected to generate 0.79 times more return on investment than Airtel Africa. However, Advanced Info Service is 1.26 times less risky than Airtel Africa. It trades about 0.01 of its potential returns per unit of risk. Airtel Africa Plc is currently generating about -0.07 per unit of risk. If you would invest 825.00 in Advanced Info Service on August 26, 2024 and sell it today you would lose (16.00) from holding Advanced Info Service or give up 1.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advanced Info Service vs. Airtel Africa Plc
Performance |
| Timeline |
| Advanced Info Service |
| Airtel Africa Plc |
Advanced Info and Airtel Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advanced Info and Airtel Africa
The main advantage of trading using opposite Advanced Info and Airtel Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advanced Info 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.| Advanced Info vs. Vodafone Group PLC | Advanced Info vs. KDDI Corp | Advanced Info vs. Amrica Mvil, SAB | Advanced Info vs. Singapore Telecommunications Limited |
| Airtel Africa vs. BCE Inc | Airtel Africa vs. Axiologix | Airtel Africa vs. Advanced Info Service | Airtel Africa vs. American Nortel Communications |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
| Technical Analysis Check basic technical indicators and analysis based on most latest market data | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance |