Correlation Between East Africa and Super League
Can any of the company-specific risk be diversified away by investing in both East Africa and Super League 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 Super League 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 Super League Enterprise, you can compare the effects of market volatilities on East Africa and Super League 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 Super League. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Super League.
Diversification Opportunities for East Africa and Super League
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between East and Super is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Super League Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Super League Enterprise 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 Super League. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Super League Enterprise has no effect on the direction of East Africa i.e., East Africa and Super League go up and down completely randomly.
Pair Corralation between East Africa and Super League
Assuming the 90 days horizon East Africa Metals is expected to generate 7.91 times more return on investment than Super League. However, East Africa is 7.91 times more volatile than Super League Enterprise. It trades about 0.09 of its potential returns per unit of risk. Super League Enterprise is currently generating about -0.02 per unit of risk. If you would invest 9.15 in East Africa Metals on September 25, 2024 and sell it today you would earn a total of 1.85 from holding East Africa Metals or generate 20.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
East Africa Metals vs. Super League Enterprise
Performance |
| Timeline |
| East Africa Metals |
| Super League Enterprise |
East Africa and Super League Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Super League
The main advantage of trading using opposite East Africa and Super League positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Super League 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 Super League will offset losses from the drop in Super League's long position.| East Africa vs. Puma Exploration | East Africa vs. Sixty North Gold | East Africa vs. Red Pine Exploration | East Africa vs. Altamira Gold Corp |
| Super League vs. Asure Software | Super League vs. Joint Stock | Super League vs. Uber Technologies | Super League vs. Qualys Inc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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