Correlation Between KENYA AIRWAYS and UMEME
Can any of the company-specific risk be diversified away by investing in both KENYA AIRWAYS and UMEME 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 KENYA AIRWAYS and UMEME into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KENYA AIRWAYS LTD and UMEME LIMITED, you can compare the effects of market volatilities on KENYA AIRWAYS and UMEME 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 KENYA AIRWAYS with a short position of UMEME. Check out your portfolio center. Please also check ongoing floating volatility patterns of KENYA AIRWAYS and UMEME.
Diversification Opportunities for KENYA AIRWAYS and UMEME
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KENYA and UMEME is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding KENYA AIRWAYS LTD and UMEME LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UMEME LIMITED and KENYA AIRWAYS 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 KENYA AIRWAYS LTD are associated (or correlated) with UMEME. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UMEME LIMITED has no effect on the direction of KENYA AIRWAYS i.e., KENYA AIRWAYS and UMEME go up and down completely randomly.
Pair Corralation between KENYA AIRWAYS and UMEME
If you would invest 0.00 in UMEME LIMITED on November 28, 2024 and sell it today you would earn a total of 0.00 from holding UMEME LIMITED or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 4.55% |
| Values | Daily Returns |
KENYA AIRWAYS LTD vs. UMEME LIMITED
Performance |
| Timeline |
| KENYA AIRWAYS LTD |
| UMEME LIMITED |
Risk-Adjusted Performance
Very Weak
Weak | Strong |
KENYA AIRWAYS and UMEME Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KENYA AIRWAYS and UMEME
The main advantage of trading using opposite KENYA AIRWAYS and UMEME positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KENYA AIRWAYS position performs unexpectedly, UMEME 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 UMEME will offset losses from the drop in UMEME's long position.| KENYA AIRWAYS vs. NATION MEDIA GROUP | KENYA AIRWAYS vs. QUALITY CHEMICAL INDUSTRIES | KENYA AIRWAYS vs. EAST AFRICAN BREWERIES | KENYA AIRWAYS vs. BRITISH AMERICAN TOBACCO |
| UMEME vs. BRITISH AMERICAN TOBACCO | UMEME vs. STANBIC BANK HOLDINGS | UMEME vs. EAST AFRICAN BREWERIES | UMEME vs. NATION MEDIA GROUP |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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