Correlation Between CAFCA and STAR AFRICA
Specify exactly 2 symbols:
By analyzing existing cross correlation between CAFCA LIMITED and STAR AFRICA PORATION, you can compare the effects of market volatilities on CAFCA and STAR 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 CAFCA with a short position of STAR AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAFCA and STAR AFRICA.
Diversification Opportunities for CAFCA and STAR AFRICA
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CAFCA and STAR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding CAFCA LIMITED and STAR AFRICA PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR AFRICA PORATION and CAFCA 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 CAFCA LIMITED are associated (or correlated) with STAR AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR AFRICA PORATION has no effect on the direction of CAFCA i.e., CAFCA and STAR AFRICA go up and down completely randomly.
Pair Corralation between CAFCA and STAR AFRICA
Assuming the 90 days trading horizon CAFCA LIMITED is expected to generate 0.79 times more return on investment than STAR AFRICA. However, CAFCA LIMITED is 1.26 times less risky than STAR AFRICA. It trades about 0.3 of its potential returns per unit of risk. STAR AFRICA PORATION is currently generating about 0.11 per unit of risk. If you would invest 156,000 in CAFCA LIMITED on August 30, 2024 and sell it today you would earn a total of 49,000 from holding CAFCA LIMITED or generate 31.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAFCA LIMITED vs. STAR AFRICA PORATION
Performance |
| Timeline |
| CAFCA LIMITED |
| STAR AFRICA PORATION |
CAFCA and STAR AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAFCA and STAR AFRICA
The main advantage of trading using opposite CAFCA and STAR AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAFCA position performs unexpectedly, STAR 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 STAR AFRICA will offset losses from the drop in STAR AFRICA's long position.| CAFCA vs. FIRST MUTUAL PROPERTIES | CAFCA vs. BRITISH AMERICAN TOBACCO | CAFCA vs. TANGANDA TEA PANY | CAFCA vs. ZB FINANCIAL HOLDINGS |
| STAR AFRICA vs. FIRST MUTUAL PROPERTIES | STAR AFRICA vs. BRITISH AMERICAN TOBACCO | STAR AFRICA vs. TANGANDA TEA PANY | STAR AFRICA vs. ZB FINANCIAL HOLDINGS |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |