Correlation Between MEIKLES AFRICA and STAR AFRICA
Can any of the company-specific risk be diversified away by investing in both MEIKLES AFRICA and STAR AFRICA 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 STAR AFRICA 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 STAR AFRICA PORATION, you can compare the effects of market volatilities on MEIKLES AFRICA and STAR AFRICA 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 STAR AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of MEIKLES AFRICA and STAR AFRICA.
Diversification Opportunities for MEIKLES AFRICA and STAR AFRICA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MEIKLES and STAR is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding MEIKLES AFRICA LIMITED and STAR AFRICA PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STAR AFRICA PORATION 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 STAR AFRICA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STAR AFRICA PORATION has no effect on the direction of MEIKLES AFRICA i.e., MEIKLES AFRICA and STAR AFRICA go up and down completely randomly.
Pair Corralation between MEIKLES AFRICA and STAR AFRICA
If you would invest (100.00) in MEIKLES AFRICA LIMITED on October 11, 2024 and sell it today you would earn a total of 100.00 from holding MEIKLES AFRICA LIMITED or generate -100.0% 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. STAR AFRICA PORATION
Performance |
| Timeline |
| MEIKLES AFRICA |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| STAR AFRICA PORATION |
MEIKLES AFRICA and STAR AFRICA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MEIKLES AFRICA and STAR AFRICA
The main advantage of trading using opposite MEIKLES AFRICA and STAR AFRICA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MEIKLES AFRICA position performs unexpectedly, STAR AFRICA 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 STAR AFRICA will offset losses from the drop in STAR AFRICA'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 |
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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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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