Correlation Between EAST AFRICAN and CIC INSURANCE
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By analyzing existing cross correlation between EAST AFRICAN BREWERIES and CIC INSURANCE GROUP, you can compare the effects of market volatilities on EAST AFRICAN and CIC INSURANCE 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 CIC INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of EAST AFRICAN and CIC INSURANCE.
Diversification Opportunities for EAST AFRICAN and CIC INSURANCE
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EAST and CIC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding EAST AFRICAN BREWERIES and CIC INSURANCE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CIC INSURANCE GROUP 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 CIC INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CIC INSURANCE GROUP has no effect on the direction of EAST AFRICAN i.e., EAST AFRICAN and CIC INSURANCE go up and down completely randomly.
Pair Corralation between EAST AFRICAN and CIC INSURANCE
Assuming the 90 days trading horizon EAST AFRICAN BREWERIES is expected to under-perform the CIC INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, EAST AFRICAN BREWERIES is 1.5 times less risky than CIC INSURANCE. The stock trades about -0.24 of its potential returns per unit of risk. The CIC INSURANCE GROUP is currently generating about -0.1 of returns per unit of risk over similar time horizon. If you would invest 219.00 in CIC INSURANCE GROUP on September 2, 2024 and sell it today you would lose (15.00) from holding CIC INSURANCE GROUP or give up 6.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
EAST AFRICAN BREWERIES vs. CIC INSURANCE GROUP
Performance |
| Timeline |
| EAST AFRICAN BREWERIES |
| CIC INSURANCE GROUP |
EAST AFRICAN and CIC INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EAST AFRICAN and CIC INSURANCE
The main advantage of trading using opposite EAST AFRICAN and CIC INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EAST AFRICAN position performs unexpectedly, CIC INSURANCE 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 CIC INSURANCE will offset losses from the drop in CIC INSURANCE's long position.| EAST AFRICAN vs. CIC INSURANCE GROUP | EAST AFRICAN vs. TOTALENERGIES MARKETING KENYA | EAST AFRICAN vs. UCHUMI SUPERMARKET PLC | EAST AFRICAN vs. HOME AFRIKA LTD |
| CIC INSURANCE vs. DIAMOND TRUST BANK | CIC INSURANCE vs. EAST AFRICAN BREWERIES | CIC INSURANCE vs. HOMEBOYZ ENTERTAINMENT PLC | CIC INSURANCE vs. CARBACID INVESTMENTS 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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