Correlation Between East Africa and Global Blockchain
Can any of the company-specific risk be diversified away by investing in both East Africa and Global Blockchain 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 East Africa and Global Blockchain into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between East Africa Metals and Global Blockchain Acquisition, you can compare the effects of market volatilities on East Africa and Global Blockchain 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 Africa with a short position of Global Blockchain. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Global Blockchain.
Diversification Opportunities for East Africa and Global Blockchain
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between East and Global is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Global Blockchain Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Global Blockchain and East Africa 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 Africa Metals are associated (or correlated) with Global Blockchain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Global Blockchain has no effect on the direction of East Africa i.e., East Africa and Global Blockchain go up and down completely randomly.
Pair Corralation between East Africa and Global Blockchain
Assuming the 90 days horizon East Africa is expected to generate 65.05 times less return on investment than Global Blockchain. But when comparing it to its historical volatility, East Africa Metals is 15.52 times less risky than Global Blockchain. It trades about 0.07 of its potential returns per unit of risk. Global Blockchain Acquisition is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1.51 in Global Blockchain Acquisition on September 1, 2024 and sell it today you would earn a total of 2.79 from holding Global Blockchain Acquisition or generate 184.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 46.46% |
| Values | Daily Returns |
East Africa Metals vs. Global Blockchain Acquisition
Performance |
| Timeline |
| East Africa Metals |
| Global Blockchain |
East Africa and Global Blockchain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Global Blockchain
The main advantage of trading using opposite East Africa and Global Blockchain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Global Blockchain 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 Global Blockchain will offset losses from the drop in Global Blockchain's long position.| East Africa vs. Pasinex Resources Limited | East Africa vs. Commander Resources | East Africa vs. Forsys Metals Corp | East Africa vs. American CuMo Mining |
| Global Blockchain vs. Visa Class A | Global Blockchain vs. Diamond Hill Investment | Global Blockchain vs. Distoken Acquisition | Global Blockchain vs. Associated Capital Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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