Correlation Between CRDB BANK and NATIONAL INVESTMENT
Can any of the company-specific risk be diversified away by investing in both CRDB BANK and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT 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 NATIONAL INVESTMENT PANY, you can compare the effects of market volatilities on CRDB BANK and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of CRDB BANK and NATIONAL INVESTMENT.
Diversification Opportunities for CRDB BANK and NATIONAL INVESTMENT
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between CRDB and NATIONAL is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding CRDB BANK LTD and NATIONAL INVESTMENT PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT PANY 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 NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT PANY has no effect on the direction of CRDB BANK i.e., CRDB BANK and NATIONAL INVESTMENT go up and down completely randomly.
Pair Corralation between CRDB BANK and NATIONAL INVESTMENT
Assuming the 90 days trading horizon CRDB BANK is expected to generate 20.23 times less return on investment than NATIONAL INVESTMENT. But when comparing it to its historical volatility, CRDB BANK LTD is 40.97 times less risky than NATIONAL INVESTMENT. It trades about 0.1 of its potential returns per unit of risk. NATIONAL INVESTMENT PANY is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 41,500 in NATIONAL INVESTMENT PANY on August 31, 2024 and sell it today you would earn a total of 27,500 from holding NATIONAL INVESTMENT PANY or generate 66.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CRDB BANK LTD vs. NATIONAL INVESTMENT PANY
Performance |
| Timeline |
| CRDB BANK LTD |
| NATIONAL INVESTMENT PANY |
CRDB BANK and NATIONAL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CRDB BANK and NATIONAL INVESTMENT
The main advantage of trading using opposite CRDB BANK and NATIONAL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CRDB BANK position performs unexpectedly, NATIONAL INVESTMENT 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 NATIONAL INVESTMENT will offset losses from the drop in NATIONAL INVESTMENT's long position.| CRDB BANK vs. YETU MICROFINANCE PLC | CRDB BANK vs. AFRIPRISE INVESTMENT PLC | CRDB BANK vs. PRECISION AIR SERVICES | CRDB BANK vs. MKOMBOZI MERCIAL BANK |
| NATIONAL INVESTMENT vs. YETU MICROFINANCE PLC | NATIONAL INVESTMENT vs. AFRIPRISE INVESTMENT PLC | NATIONAL INVESTMENT vs. PRECISION AIR SERVICES | NATIONAL INVESTMENT vs. MKOMBOZI MERCIAL BANK |
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 CEOs Directory module to screen CEOs from public companies around the world.
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