Correlation Between EQUITY GROUP and KENYA ORCHARDS
Can any of the company-specific risk be diversified away by investing in both EQUITY GROUP and KENYA ORCHARDS 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 EQUITY GROUP and KENYA ORCHARDS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EQUITY GROUP HOLDINGS and KENYA ORCHARDS LTD, you can compare the effects of market volatilities on EQUITY GROUP and KENYA ORCHARDS 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 EQUITY GROUP with a short position of KENYA ORCHARDS. Check out your portfolio center. Please also check ongoing floating volatility patterns of EQUITY GROUP and KENYA ORCHARDS.
Diversification Opportunities for EQUITY GROUP and KENYA ORCHARDS
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between EQUITY and KENYA is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding EQUITY GROUP HOLDINGS and KENYA ORCHARDS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENYA ORCHARDS LTD and EQUITY GROUP 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 EQUITY GROUP HOLDINGS are associated (or correlated) with KENYA ORCHARDS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENYA ORCHARDS LTD has no effect on the direction of EQUITY GROUP i.e., EQUITY GROUP and KENYA ORCHARDS go up and down completely randomly.
Pair Corralation between EQUITY GROUP and KENYA ORCHARDS
If you would invest 4,810 in EQUITY GROUP HOLDINGS on September 12, 2024 and sell it today you would lose (10.00) from holding EQUITY GROUP HOLDINGS or give up 0.21% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
EQUITY GROUP HOLDINGS vs. KENYA ORCHARDS LTD
Performance |
| Timeline |
| EQUITY GROUP HOLDINGS |
| KENYA ORCHARDS LTD |
EQUITY GROUP and KENYA ORCHARDS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with EQUITY GROUP and KENYA ORCHARDS
The main advantage of trading using opposite EQUITY GROUP and KENYA ORCHARDS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EQUITY GROUP position performs unexpectedly, KENYA ORCHARDS 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 KENYA ORCHARDS will offset losses from the drop in KENYA ORCHARDS's long position.| EQUITY GROUP vs. CARBACID INVESTMENTS LTD | EQUITY GROUP vs. UCHUMI SUPERMARKET PLC | EQUITY GROUP vs. EAST AFRICAN BREWERIES | EQUITY GROUP vs. Kenya Reinsurance |
| KENYA ORCHARDS vs. NCBA GROUP PLC | KENYA ORCHARDS vs. EAST AFRICAN BREWERIES | KENYA ORCHARDS vs. STANDARD CHARTERED BANK | KENYA ORCHARDS vs. ABSA BANK OF |
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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Global Correlations Find global opportunities by holding instruments from different markets |