Correlation Between EAST AFRICAN and AFRIPRISE INVESTMENT
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By analyzing existing cross correlation between EAST AFRICAN BREWERIES and AFRIPRISE INVESTMENT PLC, you can compare the effects of market volatilities on EAST AFRICAN and AFRIPRISE 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 EAST AFRICAN with a short position of AFRIPRISE INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST AFRICAN and AFRIPRISE INVESTMENT.
Diversification Opportunities for EAST AFRICAN and AFRIPRISE INVESTMENT
0.76 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EAST and AFRIPRISE is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding EAST AFRICAN BREWERIES and AFRIPRISE INVESTMENT PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFRIPRISE INVESTMENT PLC and EAST AFRICAN 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 EAST AFRICAN BREWERIES are associated (or correlated) with AFRIPRISE INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFRIPRISE INVESTMENT PLC has no effect on the direction of EAST AFRICAN i.e., EAST AFRICAN and AFRIPRISE INVESTMENT go up and down completely randomly.
Pair Corralation between EAST AFRICAN and AFRIPRISE INVESTMENT
Assuming the 90 days trading horizon EAST AFRICAN BREWERIES is expected to generate 1.71 times more return on investment than AFRIPRISE INVESTMENT. However, EAST AFRICAN is 1.71 times more volatile than AFRIPRISE INVESTMENT PLC. It trades about 0.04 of its potential returns per unit of risk. AFRIPRISE INVESTMENT PLC is currently generating about -0.07 per unit of risk. If you would invest 350,000 in EAST AFRICAN BREWERIES on October 26, 2024 and sell it today you would earn a total of 14,000 from holding EAST AFRICAN BREWERIES or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAST AFRICAN BREWERIES vs. AFRIPRISE INVESTMENT PLC
Performance |
| Timeline |
| EAST AFRICAN BREWERIES |
| AFRIPRISE INVESTMENT PLC |
EAST AFRICAN and AFRIPRISE INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAST AFRICAN and AFRIPRISE INVESTMENT
The main advantage of trading using opposite EAST AFRICAN and AFRIPRISE INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST AFRICAN position performs unexpectedly, AFRIPRISE 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 AFRIPRISE INVESTMENT will offset losses from the drop in AFRIPRISE INVESTMENT's long position.| EAST AFRICAN vs. YETU MICROFINANCE PLC | EAST AFRICAN vs. MUCOBA BANK PLC | EAST AFRICAN vs. TANZANIA PORTLAND CEMENT | EAST AFRICAN vs. TOL GASES LTD |
| AFRIPRISE INVESTMENT vs. YETU MICROFINANCE PLC | AFRIPRISE INVESTMENT vs. MUCOBA BANK PLC | AFRIPRISE INVESTMENT vs. TANZANIA PORTLAND CEMENT | AFRIPRISE INVESTMENT 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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