Correlation Between MAENDELEO BANK and CRDB BANK
Can any of the company-specific risk be diversified away by investing in both MAENDELEO BANK and CRDB BANK 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 MAENDELEO BANK and CRDB BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MAENDELEO BANK PLC and CRDB BANK LTD, you can compare the effects of market volatilities on MAENDELEO BANK and CRDB BANK 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 MAENDELEO BANK with a short position of CRDB BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAENDELEO BANK and CRDB BANK.
Diversification Opportunities for MAENDELEO BANK and CRDB BANK
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MAENDELEO and CRDB is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MAENDELEO BANK PLC and CRDB BANK LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRDB BANK LTD and MAENDELEO BANK 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 MAENDELEO BANK PLC are associated (or correlated) with CRDB BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRDB BANK LTD has no effect on the direction of MAENDELEO BANK i.e., MAENDELEO BANK and CRDB BANK go up and down completely randomly.
Pair Corralation between MAENDELEO BANK and CRDB BANK
If you would invest 66,000 in CRDB BANK LTD on October 25, 2024 and sell it today you would earn a total of 0.00 from holding CRDB BANK LTD or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAENDELEO BANK PLC vs. CRDB BANK LTD
Performance |
| Timeline |
| MAENDELEO BANK PLC |
| CRDB BANK LTD |
MAENDELEO BANK and CRDB BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAENDELEO BANK and CRDB BANK
The main advantage of trading using opposite MAENDELEO BANK and CRDB BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAENDELEO BANK position performs unexpectedly, CRDB BANK 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 CRDB BANK will offset losses from the drop in CRDB BANK's long position.| MAENDELEO BANK vs. YETU MICROFINANCE PLC | MAENDELEO BANK vs. MUCOBA BANK PLC | MAENDELEO BANK vs. TANZANIA PORTLAND CEMENT | MAENDELEO BANK vs. TOL GASES LTD |
| CRDB BANK vs. YETU MICROFINANCE PLC | CRDB BANK vs. MUCOBA BANK PLC | CRDB BANK vs. TANZANIA PORTLAND CEMENT | CRDB BANK vs. TOL GASES 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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