Correlation Between MKOMBOZI MERCIAL and KENYA MERCIAL
Can any of the company-specific risk be diversified away by investing in both MKOMBOZI MERCIAL and KENYA MERCIAL 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 MKOMBOZI MERCIAL and KENYA MERCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MKOMBOZI MERCIAL BANK and KENYA MERCIAL BANK, you can compare the effects of market volatilities on MKOMBOZI MERCIAL and KENYA MERCIAL 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 MKOMBOZI MERCIAL with a short position of KENYA MERCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of MKOMBOZI MERCIAL and KENYA MERCIAL.
Diversification Opportunities for MKOMBOZI MERCIAL and KENYA MERCIAL
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between MKOMBOZI and KENYA is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding MKOMBOZI MERCIAL BANK and KENYA MERCIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENYA MERCIAL BANK and MKOMBOZI 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 MKOMBOZI MERCIAL BANK are associated (or correlated) with KENYA MERCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENYA MERCIAL BANK has no effect on the direction of MKOMBOZI MERCIAL i.e., MKOMBOZI MERCIAL and KENYA MERCIAL go up and down completely randomly.
Pair Corralation between MKOMBOZI MERCIAL and KENYA MERCIAL
Assuming the 90 days trading horizon MKOMBOZI MERCIAL is expected to generate 1.96 times less return on investment than KENYA MERCIAL. But when comparing it to its historical volatility, MKOMBOZI MERCIAL BANK is 1.22 times less risky than KENYA MERCIAL. It trades about 0.12 of its potential returns per unit of risk. KENYA MERCIAL BANK is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 80,000 in KENYA MERCIAL BANK on November 4, 2024 and sell it today you would earn a total of 6,000 from holding KENYA MERCIAL BANK or generate 7.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MKOMBOZI MERCIAL BANK vs. KENYA MERCIAL BANK
Performance |
| Timeline |
| MKOMBOZI MERCIAL BANK |
| KENYA MERCIAL BANK |
MKOMBOZI MERCIAL and KENYA MERCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MKOMBOZI MERCIAL and KENYA MERCIAL
The main advantage of trading using opposite MKOMBOZI MERCIAL and KENYA MERCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MKOMBOZI MERCIAL position performs unexpectedly, KENYA MERCIAL 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 KENYA MERCIAL will offset losses from the drop in KENYA MERCIAL's long position.| MKOMBOZI MERCIAL vs. YETU MICROFINANCE PLC | MKOMBOZI MERCIAL vs. CRDB BANK LTD | MKOMBOZI MERCIAL vs. NATION MEDIA GROUP | MKOMBOZI MERCIAL vs. MWALIMU MERCIAL BANK |
| KENYA MERCIAL vs. YETU MICROFINANCE PLC | KENYA MERCIAL vs. CRDB BANK LTD | KENYA MERCIAL vs. NATION MEDIA GROUP | KENYA MERCIAL vs. MWALIMU MERCIAL BANK |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Stocks Directory Find actively traded stocks across global markets | |
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |