Correlation Between ECOBANK GHANA and FAN MILK
Can any of the company-specific risk be diversified away by investing in both ECOBANK GHANA and FAN MILK 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 FAN MILK 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 FAN MILK LTD, you can compare the effects of market volatilities on ECOBANK GHANA and FAN MILK 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 FAN MILK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ECOBANK GHANA and FAN MILK.
Diversification Opportunities for ECOBANK GHANA and FAN MILK
0.43 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between ECOBANK and FAN is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding ECOBANK GHANA LIMITED and FAN MILK LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FAN MILK 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 FAN MILK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FAN MILK LTD has no effect on the direction of ECOBANK GHANA i.e., ECOBANK GHANA and FAN MILK go up and down completely randomly.
Pair Corralation between ECOBANK GHANA and FAN MILK
If you would invest 610.00 in ECOBANK GHANA LIMITED on August 28, 2024 and sell it today you would earn a total of 40.00 from holding ECOBANK GHANA LIMITED or generate 6.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ECOBANK GHANA LIMITED vs. FAN MILK LTD
Performance |
| Timeline |
| ECOBANK GHANA LIMITED |
| FAN MILK LTD |
ECOBANK GHANA and FAN MILK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ECOBANK GHANA and FAN MILK
The main advantage of trading using opposite ECOBANK GHANA and FAN MILK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ECOBANK GHANA position performs unexpectedly, FAN MILK 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 FAN MILK will offset losses from the drop in FAN MILK's long position.| ECOBANK GHANA vs. TRUST BANK LIMITED | ECOBANK GHANA vs. AGRICULTURAL DEVELOPMENT BANK | ECOBANK GHANA vs. STANDARD CHARTERED BANK | ECOBANK GHANA vs. GUINNESS GHANA BREWERIES |
| FAN MILK vs. ECOBANK GHANA LIMITED | FAN MILK vs. DIGICUT ADVERTISING PRODUCTION | FAN MILK vs. AGRICULTURAL DEVELOPMENT BANK | FAN MILK vs. HORDS LTD |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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