Correlation Between CO OPERATIVE and EQUITY GROUP
Can any of the company-specific risk be diversified away by investing in both CO OPERATIVE and EQUITY GROUP 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 CO OPERATIVE and EQUITY GROUP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CO OPERATIVE BANK OF and EQUITY GROUP HOLDINGS, you can compare the effects of market volatilities on CO OPERATIVE and EQUITY GROUP 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 CO OPERATIVE with a short position of EQUITY GROUP. Check out your portfolio center. Please also check ongoing floating volatility patterns of CO OPERATIVE and EQUITY GROUP.
Diversification Opportunities for CO OPERATIVE and EQUITY GROUP
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CBKL and EQUITY is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding CO OPERATIVE BANK OF and EQUITY GROUP HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EQUITY GROUP HOLDINGS and CO OPERATIVE 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 CO OPERATIVE BANK OF are associated (or correlated) with EQUITY GROUP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EQUITY GROUP HOLDINGS has no effect on the direction of CO OPERATIVE i.e., CO OPERATIVE and EQUITY GROUP go up and down completely randomly.
Pair Corralation between CO OPERATIVE and EQUITY GROUP
Assuming the 90 days trading horizon CO OPERATIVE BANK OF is expected to generate 0.65 times more return on investment than EQUITY GROUP. However, CO OPERATIVE BANK OF is 1.53 times less risky than EQUITY GROUP. It trades about 0.03 of its potential returns per unit of risk. EQUITY GROUP HOLDINGS is currently generating about 0.01 per unit of risk. If you would invest 1,210 in CO OPERATIVE BANK OF on September 3, 2024 and sell it today you would earn a total of 170.00 from holding CO OPERATIVE BANK OF or generate 14.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CO OPERATIVE BANK OF vs. EQUITY GROUP HOLDINGS
Performance |
| Timeline |
| CO OPERATIVE BANK |
| EQUITY GROUP HOLDINGS |
CO OPERATIVE and EQUITY GROUP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CO OPERATIVE and EQUITY GROUP
The main advantage of trading using opposite CO OPERATIVE and EQUITY GROUP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CO OPERATIVE position performs unexpectedly, EQUITY GROUP 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 EQUITY GROUP will offset losses from the drop in EQUITY GROUP's long position.| CO OPERATIVE vs. KENYA ORCHARDS LTD | CO OPERATIVE vs. NAIROBI BUSINESS VENTURES | CO OPERATIVE vs. KENYA RE INSURANCE PORATION | CO OPERATIVE vs. WPP SCANGROUP PLC |
| EQUITY GROUP vs. ABSA BANK OF | EQUITY GROUP vs. CO OPERATIVE BANK OF | EQUITY GROUP vs. TOTALENERGIES MARKETING KENYA | EQUITY GROUP vs. CARBACID INVESTMENTS LTD |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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