Correlation Between East Africa and APAAU
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By analyzing existing cross correlation between East Africa Metals and APAAU 425 15 JUL 27, you can compare the effects of market volatilities on East Africa and APAAU 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 APAAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of East Africa and APAAU.
Diversification Opportunities for East Africa and APAAU
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between East and APAAU is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding East Africa Metals and APAAU 425 15 JUL 27 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on APAAU 425 15 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 APAAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of APAAU 425 15 has no effect on the direction of East Africa i.e., East Africa and APAAU go up and down completely randomly.
Pair Corralation between East Africa and APAAU
Assuming the 90 days horizon East Africa Metals is expected to generate 69.34 times more return on investment than APAAU. However, East Africa is 69.34 times more volatile than APAAU 425 15 JUL 27. It trades about 0.08 of its potential returns per unit of risk. APAAU 425 15 JUL 27 is currently generating about 0.02 per unit of risk. If you would invest 1.10 in East Africa Metals on August 31, 2024 and sell it today you would earn a total of 9.90 from holding East Africa Metals or generate 900.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 29.49% |
| Values | Daily Returns |
East Africa Metals vs. APAAU 425 15 JUL 27
Performance |
| Timeline |
| East Africa Metals |
| APAAU 425 15 |
East Africa and APAAU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with East Africa and APAAU
The main advantage of trading using opposite East Africa and APAAU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if East Africa position performs unexpectedly, APAAU 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 APAAU will offset losses from the drop in APAAU's long position.| East Africa vs. South32 Limited | East Africa vs. NioCorp Developments Ltd | East Africa vs. HUMANA INC | East Africa vs. SCOR PK |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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