Correlation Between MEIKLES AFRICA and FIRST MUTUAL
Can any of the company-specific risk be diversified away by investing in both MEIKLES AFRICA and FIRST MUTUAL 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 MEIKLES AFRICA and FIRST MUTUAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MEIKLES AFRICA LIMITED and FIRST MUTUAL PROPERTIES, you can compare the effects of market volatilities on MEIKLES AFRICA and FIRST MUTUAL 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 MEIKLES AFRICA with a short position of FIRST MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEIKLES AFRICA and FIRST MUTUAL.
Diversification Opportunities for MEIKLES AFRICA and FIRST MUTUAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MEIKLES and FIRST is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MEIKLES AFRICA LIMITED and FIRST MUTUAL PROPERTIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST MUTUAL PROPERTIES and MEIKLES AFRICA 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 MEIKLES AFRICA LIMITED are associated (or correlated) with FIRST MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST MUTUAL PROPERTIES has no effect on the direction of MEIKLES AFRICA i.e., MEIKLES AFRICA and FIRST MUTUAL go up and down completely randomly.
Pair Corralation between MEIKLES AFRICA and FIRST MUTUAL
If you would invest 9,500 in FIRST MUTUAL PROPERTIES on October 11, 2024 and sell it today you would earn a total of 2,795 from holding FIRST MUTUAL PROPERTIES or generate 29.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
MEIKLES AFRICA LIMITED vs. FIRST MUTUAL PROPERTIES
Performance |
| Timeline |
| MEIKLES AFRICA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| FIRST MUTUAL PROPERTIES |
MEIKLES AFRICA and FIRST MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEIKLES AFRICA and FIRST MUTUAL
The main advantage of trading using opposite MEIKLES AFRICA and FIRST MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEIKLES AFRICA position performs unexpectedly, FIRST MUTUAL 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 FIRST MUTUAL will offset losses from the drop in FIRST MUTUAL's long position.| MEIKLES AFRICA vs. STAR AFRICA PORATION | MEIKLES AFRICA vs. CAFCA LIMITED | MEIKLES AFRICA vs. FIRST MUTUAL PROPERTIES | MEIKLES AFRICA vs. AFRICAN DISTILLERS LIMITED |
| FIRST MUTUAL vs. BRITISH AMERICAN TOBACCO | FIRST MUTUAL vs. TANGANDA TEA PANY | FIRST MUTUAL vs. ZB FINANCIAL HOLDINGS | FIRST MUTUAL vs. Cass Saddle Agriculture |
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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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