Correlation Between Cell Impact and Africa Oil
Can any of the company-specific risk be diversified away by investing in both Cell Impact and Africa Oil 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 Cell Impact and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cell Impact AB and Africa Oil Corp, you can compare the effects of market volatilities on Cell Impact and Africa Oil 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 Cell Impact with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cell Impact and Africa Oil.
Diversification Opportunities for Cell Impact and Africa Oil
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Cell and Africa is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Cell Impact AB and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and Cell Impact 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 Cell Impact AB are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Cell Impact i.e., Cell Impact and Africa Oil go up and down completely randomly.
Pair Corralation between Cell Impact and Africa Oil
Assuming the 90 days horizon Cell Impact AB is expected to under-perform the Africa Oil. In addition to that, Cell Impact is 1.61 times more volatile than Africa Oil Corp. It trades about -0.25 of its total potential returns per unit of risk. Africa Oil Corp is currently generating about 0.24 per unit of volatility. If you would invest 1,354 in Africa Oil Corp on August 30, 2024 and sell it today you would earn a total of 172.00 from holding Africa Oil Corp or generate 12.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Cell Impact AB vs. Africa Oil Corp
Performance |
| Timeline |
| Cell Impact AB |
| Africa Oil Corp |
Cell Impact and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cell Impact and Africa Oil
The main advantage of trading using opposite Cell Impact and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cell Impact position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| Cell Impact vs. Impact Coatings publ | Cell Impact vs. Powercell Sweden | Cell Impact vs. Oncopeptides AB | Cell Impact vs. SaltX Technology Holding |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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