Correlation Between CAUDAN DEVELOPMENT and AFREXIMBANK
Can any of the company-specific risk be diversified away by investing in both CAUDAN DEVELOPMENT and AFREXIMBANK 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 CAUDAN DEVELOPMENT and AFREXIMBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CAUDAN DEVELOPMENT LTD and AFREXIMBANK, you can compare the effects of market volatilities on CAUDAN DEVELOPMENT and AFREXIMBANK 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 CAUDAN DEVELOPMENT with a short position of AFREXIMBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CAUDAN DEVELOPMENT and AFREXIMBANK.
Diversification Opportunities for CAUDAN DEVELOPMENT and AFREXIMBANK
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CAUDAN and AFREXIMBANK is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding CAUDAN DEVELOPMENT LTD and AFREXIMBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFREXIMBANK and CAUDAN DEVELOPMENT 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 CAUDAN DEVELOPMENT LTD are associated (or correlated) with AFREXIMBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFREXIMBANK has no effect on the direction of CAUDAN DEVELOPMENT i.e., CAUDAN DEVELOPMENT and AFREXIMBANK go up and down completely randomly.
Pair Corralation between CAUDAN DEVELOPMENT and AFREXIMBANK
If you would invest 270.00 in AFREXIMBANK on September 2, 2024 and sell it today you would earn a total of 0.00 from holding AFREXIMBANK or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CAUDAN DEVELOPMENT LTD vs. AFREXIMBANK
Performance |
| Timeline |
| CAUDAN DEVELOPMENT LTD |
| AFREXIMBANK |
CAUDAN DEVELOPMENT and AFREXIMBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CAUDAN DEVELOPMENT and AFREXIMBANK
The main advantage of trading using opposite CAUDAN DEVELOPMENT and AFREXIMBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CAUDAN DEVELOPMENT position performs unexpectedly, AFREXIMBANK 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 AFREXIMBANK will offset losses from the drop in AFREXIMBANK's long position.| CAUDAN DEVELOPMENT vs. FINCORP INVESTMENT LTD | CAUDAN DEVELOPMENT vs. MCB GROUP LTD | CAUDAN DEVELOPMENT vs. LUX ISLAND RESORTS | CAUDAN DEVELOPMENT vs. NEW MAURITIUS HOTELS |
| AFREXIMBANK vs. FINCORP INVESTMENT LTD | AFREXIMBANK vs. MCB GROUP LTD | AFREXIMBANK vs. CAUDAN DEVELOPMENT LTD | AFREXIMBANK vs. LUX ISLAND RESORTS |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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