Correlation Between ECOBANK GHANA and CAMELOT GHANA
Can any of the company-specific risk be diversified away by investing in both ECOBANK GHANA and CAMELOT GHANA 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 ECOBANK GHANA and CAMELOT GHANA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ECOBANK GHANA LIMITED and CAMELOT GHANA LTD, you can compare the effects of market volatilities on ECOBANK GHANA and CAMELOT GHANA 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 ECOBANK GHANA with a short position of CAMELOT GHANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECOBANK GHANA and CAMELOT GHANA.
Diversification Opportunities for ECOBANK GHANA and CAMELOT GHANA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ECOBANK and CAMELOT is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ECOBANK GHANA LIMITED and CAMELOT GHANA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CAMELOT GHANA LTD and ECOBANK GHANA 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 ECOBANK GHANA LIMITED are associated (or correlated) with CAMELOT GHANA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CAMELOT GHANA LTD has no effect on the direction of ECOBANK GHANA i.e., ECOBANK GHANA and CAMELOT GHANA go up and down completely randomly.
Pair Corralation between ECOBANK GHANA and CAMELOT GHANA
Assuming the 90 days trading horizon ECOBANK GHANA is expected to generate 2.44 times less return on investment than CAMELOT GHANA. But when comparing it to its historical volatility, ECOBANK GHANA LIMITED is 1.72 times less risky than CAMELOT GHANA. It trades about 0.12 of its potential returns per unit of risk. CAMELOT GHANA LTD is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 12.00 in CAMELOT GHANA LTD on September 2, 2024 and sell it today you would earn a total of 2.00 from holding CAMELOT GHANA LTD or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECOBANK GHANA LIMITED vs. CAMELOT GHANA LTD
Performance |
| Timeline |
| ECOBANK GHANA LIMITED |
| CAMELOT GHANA LTD |
ECOBANK GHANA and CAMELOT GHANA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECOBANK GHANA and CAMELOT GHANA
The main advantage of trading using opposite ECOBANK GHANA and CAMELOT GHANA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECOBANK GHANA position performs unexpectedly, CAMELOT GHANA 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 CAMELOT GHANA will offset losses from the drop in CAMELOT GHANA's long position.| ECOBANK GHANA vs. SAMBA FOODS LIMITED | ECOBANK GHANA vs. SIC INSURANCE ANY | ECOBANK GHANA vs. AGRICULTURAL DEVELOPMENT BANK |
| CAMELOT GHANA vs. AGRICULTURAL DEVELOPMENT BANK | CAMELOT GHANA vs. SIC INSURANCE ANY | CAMELOT GHANA vs. DIGICUT ADVERTISING PRODUCTION | CAMELOT GHANA vs. TRUST BANK LIMITED |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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