Correlation Between BANK OF AFRICA and SMI
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By analyzing existing cross correlation between BANK OF AFRICA and SMI, you can compare the effects of market volatilities on BANK OF AFRICA and SMI 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 BANK OF AFRICA with a short position of SMI. Check out your portfolio center. Please also check ongoing floating volatility patterns of BANK OF AFRICA and SMI.
Diversification Opportunities for BANK OF AFRICA and SMI
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between BANK and SMI is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding BANK OF AFRICA and SMI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SMI and BANK OF 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 BANK OF AFRICA are associated (or correlated) with SMI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SMI has no effect on the direction of BANK OF AFRICA i.e., BANK OF AFRICA and SMI go up and down completely randomly.
Pair Corralation between BANK OF AFRICA and SMI
Assuming the 90 days trading horizon BANK OF AFRICA is expected to generate 0.55 times more return on investment than SMI. However, BANK OF AFRICA is 1.81 times less risky than SMI. It trades about 0.22 of its potential returns per unit of risk. SMI is currently generating about -0.19 per unit of risk. If you would invest 19,000 in BANK OF AFRICA on September 2, 2024 and sell it today you would earn a total of 790.00 from holding BANK OF AFRICA or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BANK OF AFRICA vs. SMI
Performance |
| Timeline |
| BANK OF AFRICA |
| SMI |
BANK OF AFRICA and SMI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BANK OF AFRICA and SMI
The main advantage of trading using opposite BANK OF AFRICA and SMI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BANK OF AFRICA position performs unexpectedly, SMI 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 SMI will offset losses from the drop in SMI's long position.| BANK OF AFRICA vs. HIGHTECH PAYMENT SYSTEMS | BANK OF AFRICA vs. MAROC LEASING | BANK OF AFRICA vs. CREDIT IMMOBILIER ET |
| SMI vs. MAROC LEASING | SMI vs. BANK OF AFRICA | SMI vs. CREDIT IMMOBILIER ET | SMI vs. HIGHTECH PAYMENT SYSTEMS |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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