Correlation Between East Africa and BBB Foods
Can any of the company-specific risk be diversified away by investing in both East Africa and BBB Foods 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 BBB Foods 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 BBB Foods, you can compare the effects of market volatilities on East Africa and BBB Foods 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 BBB Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and BBB Foods.
Diversification Opportunities for East Africa and BBB Foods
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and BBB is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and BBB Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BBB Foods 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 BBB Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BBB Foods has no effect on the direction of East Africa i.e., East Africa and BBB Foods go up and down completely randomly.
Pair Corralation between East Africa and BBB Foods
If you would invest 2,944 in BBB Foods on November 4, 2024 and sell it today you would earn a total of 158.00 from holding BBB Foods or generate 5.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
East Africa Metals vs. BBB Foods
Performance |
| Timeline |
| East Africa Metals |
| BBB Foods |
East Africa and BBB Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and BBB Foods
The main advantage of trading using opposite East Africa and BBB Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, BBB Foods 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 BBB Foods will offset losses from the drop in BBB Foods' 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 |
| BBB Foods vs. Radcom | BBB Foods vs. Snap On | BBB Foods vs. Space Communication | BBB Foods vs. Procter Gamble |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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