Correlation Between CP All and East Africa
Can any of the company-specific risk be diversified away by investing in both CP All and East Africa 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 CP All and East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CP All PCL and East Africa Metals, you can compare the effects of market volatilities on CP All and East 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 CP All with a short position of East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CP All and East Africa.
Diversification Opportunities for CP All and East Africa
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between CPPCY and East is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CP All PCL and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals and CP All 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 CP All PCL are associated (or correlated) with East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of CP All i.e., CP All and East Africa go up and down completely randomly.
Pair Corralation between CP All and East Africa
If you would invest 11.00 in East Africa Metals on October 20, 2024 and sell it today you would earn a total of 0.00 from holding East Africa Metals or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
CP All PCL vs. East Africa Metals
Performance |
| Timeline |
| CP All PCL |
| East Africa Metals |
CP All and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CP All and East Africa
The main advantage of trading using opposite CP All and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CP All position performs unexpectedly, East 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 East Africa will offset losses from the drop in East Africa's long position.| CP All vs. Kroger Company | CP All vs. Seven i Holdings | CP All vs. Seven i Holdings | CP All vs. Woolworths Group Limited |
| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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