Correlation Between MCB GROUP and AFRICAN DOMESTIC
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By analyzing existing cross correlation between MCB GROUP LTD and AFRICAN DOMESTIC BOND, you can compare the effects of market volatilities on MCB GROUP and AFRICAN DOMESTIC 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 MCB GROUP with a short position of AFRICAN DOMESTIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of MCB GROUP and AFRICAN DOMESTIC.
Diversification Opportunities for MCB GROUP and AFRICAN DOMESTIC
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between MCB and AFRICAN is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding MCB GROUP LTD and AFRICAN DOMESTIC BOND in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFRICAN DOMESTIC BOND and MCB GROUP 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 MCB GROUP LTD are associated (or correlated) with AFRICAN DOMESTIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFRICAN DOMESTIC BOND has no effect on the direction of MCB GROUP i.e., MCB GROUP and AFRICAN DOMESTIC go up and down completely randomly.
Pair Corralation between MCB GROUP and AFRICAN DOMESTIC
Assuming the 90 days trading horizon MCB GROUP LTD is expected to under-perform the AFRICAN DOMESTIC. But the stock apears to be less risky and, when comparing its historical volatility, MCB GROUP LTD is 2.58 times less risky than AFRICAN DOMESTIC. The stock trades about -0.04 of its potential returns per unit of risk. The AFRICAN DOMESTIC BOND is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 616.00 in AFRICAN DOMESTIC BOND on November 4, 2024 and sell it today you would earn a total of 19.00 from holding AFRICAN DOMESTIC BOND or generate 3.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MCB GROUP LTD vs. AFRICAN DOMESTIC BOND
Performance |
| Timeline |
| MCB GROUP LTD |
| AFRICAN DOMESTIC BOND |
MCB GROUP and AFRICAN DOMESTIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MCB GROUP and AFRICAN DOMESTIC
The main advantage of trading using opposite MCB GROUP and AFRICAN DOMESTIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MCB GROUP position performs unexpectedly, AFRICAN DOMESTIC 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 AFRICAN DOMESTIC will offset losses from the drop in AFRICAN DOMESTIC's long position.| MCB GROUP vs. ELITE MEAT PROCESSORS | MCB GROUP vs. CAVELL TOURISTIC INVESTMENTS | MCB GROUP vs. AFRICA CLEAN ENERGY | MCB GROUP vs. MAURITIUS CHEMICAL FERTILIZER |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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