Correlation Between CFG BANK and BANK OF AFRICA
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By analyzing existing cross correlation between CFG BANK and BANK OF AFRICA, you can compare the effects of market volatilities on CFG BANK and BANK OF 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 CFG BANK with a short position of BANK OF AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CFG BANK and BANK OF AFRICA.
Diversification Opportunities for CFG BANK and BANK OF AFRICA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CFG and BANK is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding CFG BANK and BANK OF AFRICA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BANK OF AFRICA and CFG BANK 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 CFG BANK are associated (or correlated) with BANK OF AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BANK OF AFRICA has no effect on the direction of CFG BANK i.e., CFG BANK and BANK OF AFRICA go up and down completely randomly.
Pair Corralation between CFG BANK and BANK OF AFRICA
Assuming the 90 days trading horizon CFG BANK is expected to generate 1.85 times more return on investment than BANK OF AFRICA. However, CFG BANK is 1.85 times more volatile than BANK OF AFRICA. It trades about 0.36 of its potential returns per unit of risk. BANK OF AFRICA is currently generating about 0.26 per unit of risk. If you would invest 18,400 in CFG BANK on August 30, 2024 and sell it today you would earn a total of 2,500 from holding CFG BANK or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CFG BANK vs. BANK OF AFRICA
Performance |
| Timeline |
| CFG BANK |
| BANK OF AFRICA |
CFG BANK and BANK OF AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CFG BANK and BANK OF AFRICA
The main advantage of trading using opposite CFG BANK and BANK OF AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CFG BANK position performs unexpectedly, BANK OF 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 BANK OF AFRICA will offset losses from the drop in BANK OF AFRICA's long position.The idea behind CFG BANK and BANK OF AFRICA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| BANK OF AFRICA vs. MICRODATA | BANK OF AFRICA vs. MAROC LEASING | BANK OF AFRICA vs. HIGHTECH PAYMENT SYSTEMS | BANK OF AFRICA vs. CREDIT IMMOBILIER ET |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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