Correlation Between CENTUM INVESTMENT and DIAMOND TRUST
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By analyzing existing cross correlation between CENTUM INVESTMENT PANY and DIAMOND TRUST BANK, you can compare the effects of market volatilities on CENTUM INVESTMENT and DIAMOND TRUST 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 CENTUM INVESTMENT with a short position of DIAMOND TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of CENTUM INVESTMENT and DIAMOND TRUST.
Diversification Opportunities for CENTUM INVESTMENT and DIAMOND TRUST
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CENTUM and DIAMOND is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CENTUM INVESTMENT PANY and DIAMOND TRUST BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DIAMOND TRUST BANK and CENTUM INVESTMENT 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 CENTUM INVESTMENT PANY are associated (or correlated) with DIAMOND TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DIAMOND TRUST BANK has no effect on the direction of CENTUM INVESTMENT i.e., CENTUM INVESTMENT and DIAMOND TRUST go up and down completely randomly.
Pair Corralation between CENTUM INVESTMENT and DIAMOND TRUST
Assuming the 90 days trading horizon CENTUM INVESTMENT PANY is expected to generate 2.87 times more return on investment than DIAMOND TRUST. However, CENTUM INVESTMENT is 2.87 times more volatile than DIAMOND TRUST BANK. It trades about 0.03 of its potential returns per unit of risk. DIAMOND TRUST BANK is currently generating about 0.05 per unit of risk. If you would invest 844.00 in CENTUM INVESTMENT PANY on September 3, 2024 and sell it today you would earn a total of 120.00 from holding CENTUM INVESTMENT PANY or generate 14.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CENTUM INVESTMENT PANY vs. DIAMOND TRUST BANK
Performance |
| Timeline |
| CENTUM INVESTMENT PANY |
| DIAMOND TRUST BANK |
CENTUM INVESTMENT and DIAMOND TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CENTUM INVESTMENT and DIAMOND TRUST
The main advantage of trading using opposite CENTUM INVESTMENT and DIAMOND TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CENTUM INVESTMENT position performs unexpectedly, DIAMOND TRUST 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 DIAMOND TRUST will offset losses from the drop in DIAMOND TRUST's long position.| CENTUM INVESTMENT vs. HOME AFRIKA LTD | CENTUM INVESTMENT vs. NATION MEDIA GROUP | CENTUM INVESTMENT vs. STANDARD CHARTERED BANK | CENTUM INVESTMENT vs. CARBACID INVESTMENTS LTD |
| DIAMOND TRUST vs. KENYA RE INSURANCE PORATION | DIAMOND TRUST vs. CIC INSURANCE GROUP | DIAMOND TRUST vs. HOMEBOYZ ENTERTAINMENT PLC | DIAMOND TRUST 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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