Correlation Between HOMEBOYZ ENTERTAINMENT and EAST AFRICAN

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Can any of the company-specific risk be diversified away by investing in both HOMEBOYZ ENTERTAINMENT and EAST AFRICAN 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 HOMEBOYZ ENTERTAINMENT and EAST AFRICAN into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between HOMEBOYZ ENTERTAINMENT PLC and EAST AFRICAN BREWERIES, you can compare the effects of market volatilities on HOMEBOYZ ENTERTAINMENT and EAST AFRICAN 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 HOMEBOYZ ENTERTAINMENT with a short position of EAST AFRICAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOMEBOYZ ENTERTAINMENT and EAST AFRICAN.

Diversification Opportunities for HOMEBOYZ ENTERTAINMENT and EAST AFRICAN

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between HOMEBOYZ and EAST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOMEBOYZ ENTERTAINMENT PLC and EAST AFRICAN BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EAST AFRICAN BREWERIES and HOMEBOYZ ENTERTAINMENT 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 HOMEBOYZ ENTERTAINMENT PLC are associated (or correlated) with EAST AFRICAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EAST AFRICAN BREWERIES has no effect on the direction of HOMEBOYZ ENTERTAINMENT i.e., HOMEBOYZ ENTERTAINMENT and EAST AFRICAN go up and down completely randomly.

Pair Corralation between HOMEBOYZ ENTERTAINMENT and EAST AFRICAN

If you would invest  15,600  in EAST AFRICAN BREWERIES on August 28, 2024 and sell it today you would earn a total of  2,400  from holding EAST AFRICAN BREWERIES or generate 15.38% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy97.5%
ValuesDaily Returns

HOMEBOYZ ENTERTAINMENT PLC  vs.  EAST AFRICAN BREWERIES

 Performance 
       Timeline  
HOMEBOYZ ENTERTAINMENT 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days HOMEBOYZ ENTERTAINMENT PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, HOMEBOYZ ENTERTAINMENT is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
EAST AFRICAN BREWERIES 

Risk-Adjusted Performance

7 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in EAST AFRICAN BREWERIES are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, EAST AFRICAN sustained solid returns over the last few months and may actually be approaching a breakup point.

HOMEBOYZ ENTERTAINMENT and EAST AFRICAN Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HOMEBOYZ ENTERTAINMENT and EAST AFRICAN

The main advantage of trading using opposite HOMEBOYZ ENTERTAINMENT and EAST AFRICAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HOMEBOYZ ENTERTAINMENT position performs unexpectedly, EAST AFRICAN 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 EAST AFRICAN will offset losses from the drop in EAST AFRICAN's long position.
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The idea behind HOMEBOYZ ENTERTAINMENT PLC and EAST AFRICAN BREWERIES pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..

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