Correlation Between East Africa and Tefron
Can any of the company-specific risk be diversified away by investing in both East Africa and Tefron 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 Tefron 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 Tefron, you can compare the effects of market volatilities on East Africa and Tefron 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 Tefron. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and Tefron.
Diversification Opportunities for East Africa and Tefron
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between East and Tefron is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and Tefron in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tefron 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 Tefron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tefron has no effect on the direction of East Africa i.e., East Africa and Tefron go up and down completely randomly.
Pair Corralation between East Africa and Tefron
If you would invest 260.00 in Tefron on August 31, 2024 and sell it today you would earn a total of 0.00 from holding Tefron or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 4.55% |
| Values | Daily Returns |
East Africa Metals vs. Tefron
Performance |
| Timeline |
| East Africa Metals |
| Tefron |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
East Africa and Tefron Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and Tefron
The main advantage of trading using opposite East Africa and Tefron positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, Tefron 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 Tefron will offset losses from the drop in Tefron's long position.| East Africa vs. South32 Limited | East Africa vs. NioCorp Developments Ltd | East Africa vs. HUMANA INC | East Africa vs. SCOR PK |
| Tefron vs. LB Foster | Tefron vs. Inflection Point Acquisition | Tefron vs. SunLink Health Systems | Tefron vs. Cedar Realty Trust |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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