Correlation Between Goodbye Kansas and Africa Oil
Can any of the company-specific risk be diversified away by investing in both Goodbye Kansas and Africa Oil 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 Goodbye Kansas and Africa Oil into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Goodbye Kansas Group and Africa Oil Corp, you can compare the effects of market volatilities on Goodbye Kansas and Africa Oil 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 Goodbye Kansas with a short position of Africa Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Goodbye Kansas and Africa Oil.
Diversification Opportunities for Goodbye Kansas and Africa Oil
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Goodbye and Africa is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Goodbye Kansas Group and Africa Oil Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Africa Oil Corp and Goodbye Kansas 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 Goodbye Kansas Group are associated (or correlated) with Africa Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Africa Oil Corp has no effect on the direction of Goodbye Kansas i.e., Goodbye Kansas and Africa Oil go up and down completely randomly.
Pair Corralation between Goodbye Kansas and Africa Oil
Assuming the 90 days trading horizon Goodbye Kansas Group is expected to generate 2.56 times more return on investment than Africa Oil. However, Goodbye Kansas is 2.56 times more volatile than Africa Oil Corp. It trades about 0.13 of its potential returns per unit of risk. Africa Oil Corp is currently generating about -0.27 per unit of risk. If you would invest 134.00 in Goodbye Kansas Group on September 24, 2024 and sell it today you would earn a total of 13.00 from holding Goodbye Kansas Group or generate 9.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Goodbye Kansas Group vs. Africa Oil Corp
Performance |
| Timeline |
| Goodbye Kansas Group |
| Africa Oil Corp |
Goodbye Kansas and Africa Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Goodbye Kansas and Africa Oil
The main advantage of trading using opposite Goodbye Kansas and Africa Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Goodbye Kansas position performs unexpectedly, Africa Oil 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 Africa Oil will offset losses from the drop in Africa Oil's long position.| Goodbye Kansas vs. Modern Times Group | Goodbye Kansas vs. Millicom International Cellular | Goodbye Kansas vs. Tele2 AB | Goodbye Kansas vs. BHG Group AB |
| Africa Oil vs. GomSpace Group AB | Africa Oil vs. SaltX Technology Holding | Africa Oil vs. Ambu AS | Africa Oil vs. Fingerprint Cards AB |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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