Correlation Between MWALIMU MERCIAL and NATIONAL MICROFINANCE
Can any of the company-specific risk be diversified away by investing in both MWALIMU MERCIAL and NATIONAL MICROFINANCE 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 MWALIMU MERCIAL and NATIONAL MICROFINANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MWALIMU MERCIAL BANK and NATIONAL MICROFINANCE BANK, you can compare the effects of market volatilities on MWALIMU MERCIAL and NATIONAL MICROFINANCE 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 MWALIMU MERCIAL with a short position of NATIONAL MICROFINANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MWALIMU MERCIAL and NATIONAL MICROFINANCE.
Diversification Opportunities for MWALIMU MERCIAL and NATIONAL MICROFINANCE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MWALIMU and NATIONAL is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MWALIMU MERCIAL BANK and NATIONAL MICROFINANCE BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL MICROFINANCE and MWALIMU MERCIAL 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 MWALIMU MERCIAL BANK are associated (or correlated) with NATIONAL MICROFINANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL MICROFINANCE has no effect on the direction of MWALIMU MERCIAL i.e., MWALIMU MERCIAL and NATIONAL MICROFINANCE go up and down completely randomly.
Pair Corralation between MWALIMU MERCIAL and NATIONAL MICROFINANCE
If you would invest 540,000 in NATIONAL MICROFINANCE BANK on October 26, 2024 and sell it today you would earn a total of 20,000 from holding NATIONAL MICROFINANCE BANK or generate 3.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MWALIMU MERCIAL BANK vs. NATIONAL MICROFINANCE BANK
Performance |
| Timeline |
| MWALIMU MERCIAL BANK |
| NATIONAL MICROFINANCE |
MWALIMU MERCIAL and NATIONAL MICROFINANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MWALIMU MERCIAL and NATIONAL MICROFINANCE
The main advantage of trading using opposite MWALIMU MERCIAL and NATIONAL MICROFINANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MWALIMU MERCIAL position performs unexpectedly, NATIONAL MICROFINANCE 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 NATIONAL MICROFINANCE will offset losses from the drop in NATIONAL MICROFINANCE's long position.| MWALIMU MERCIAL vs. YETU MICROFINANCE PLC | MWALIMU MERCIAL vs. MUCOBA BANK PLC | MWALIMU MERCIAL vs. TANZANIA PORTLAND CEMENT | MWALIMU MERCIAL vs. TOL GASES LTD |
| NATIONAL MICROFINANCE vs. YETU MICROFINANCE PLC | NATIONAL MICROFINANCE vs. MUCOBA BANK PLC | NATIONAL MICROFINANCE vs. TANZANIA PORTLAND CEMENT | NATIONAL MICROFINANCE 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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