Correlation Between CRDB BANK and MAENDELEO BANK
Can any of the company-specific risk be diversified away by investing in both CRDB BANK and MAENDELEO BANK 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 CRDB BANK and MAENDELEO BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CRDB BANK LTD and MAENDELEO BANK PLC, you can compare the effects of market volatilities on CRDB BANK and MAENDELEO BANK 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 CRDB BANK with a short position of MAENDELEO BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRDB BANK and MAENDELEO BANK.
Diversification Opportunities for CRDB BANK and MAENDELEO BANK
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CRDB and MAENDELEO is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding CRDB BANK LTD and MAENDELEO BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MAENDELEO BANK PLC and CRDB 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 CRDB BANK LTD are associated (or correlated) with MAENDELEO BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MAENDELEO BANK PLC has no effect on the direction of CRDB BANK i.e., CRDB BANK and MAENDELEO BANK go up and down completely randomly.
Pair Corralation between CRDB BANK and MAENDELEO BANK
If you would invest 66,000 in CRDB BANK LTD on October 25, 2024 and sell it today you would earn a total of 0.00 from holding CRDB BANK LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRDB BANK LTD vs. MAENDELEO BANK PLC
Performance |
| Timeline |
| CRDB BANK LTD |
| MAENDELEO BANK PLC |
CRDB BANK and MAENDELEO BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRDB BANK and MAENDELEO BANK
The main advantage of trading using opposite CRDB BANK and MAENDELEO BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRDB BANK position performs unexpectedly, MAENDELEO BANK 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 MAENDELEO BANK will offset losses from the drop in MAENDELEO BANK's long position.| CRDB BANK vs. YETU MICROFINANCE PLC | CRDB BANK vs. MUCOBA BANK PLC | CRDB BANK vs. TANZANIA PORTLAND CEMENT | CRDB BANK vs. TOL GASES LTD |
| MAENDELEO BANK vs. YETU MICROFINANCE PLC | MAENDELEO BANK vs. MUCOBA BANK PLC | MAENDELEO BANK vs. TANZANIA PORTLAND CEMENT | MAENDELEO BANK vs. TOL GASES 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 Stocks Directory module to find actively traded stocks across global markets.
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