Correlation Between NATIONAL INVESTMENT and KENYA MERCIAL
Can any of the company-specific risk be diversified away by investing in both NATIONAL INVESTMENT 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 NATIONAL INVESTMENT and KENYA MERCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NATIONAL INVESTMENT PANY and KENYA MERCIAL BANK, you can compare the effects of market volatilities on NATIONAL INVESTMENT 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 NATIONAL INVESTMENT with a short position of KENYA MERCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and KENYA MERCIAL.
Diversification Opportunities for NATIONAL INVESTMENT and KENYA MERCIAL
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between NATIONAL and KENYA is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT PANY 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 NATIONAL INVESTMENT 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 NATIONAL INVESTMENT PANY 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 NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and KENYA MERCIAL go up and down completely randomly.
Pair Corralation between NATIONAL INVESTMENT and KENYA MERCIAL
Assuming the 90 days trading horizon NATIONAL INVESTMENT PANY is expected to under-perform the KENYA MERCIAL. But the stock apears to be less risky and, when comparing its historical volatility, NATIONAL INVESTMENT PANY is 2.16 times less risky than KENYA MERCIAL. The stock trades about -0.22 of its potential returns per unit of risk. The KENYA MERCIAL BANK is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 78,000 in KENYA MERCIAL BANK on October 24, 2024 and sell it today you would earn a total of 8,000 from holding KENYA MERCIAL BANK or generate 10.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATIONAL INVESTMENT PANY vs. KENYA MERCIAL BANK
Performance |
| Timeline |
| NATIONAL INVESTMENT PANY |
| KENYA MERCIAL BANK |
NATIONAL INVESTMENT and KENYA MERCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL INVESTMENT and KENYA MERCIAL
The main advantage of trading using opposite NATIONAL INVESTMENT and KENYA MERCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL INVESTMENT 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.| NATIONAL INVESTMENT vs. NATIONAL MICROFINANCE BANK | NATIONAL INVESTMENT vs. NATION MEDIA GROUP | NATIONAL INVESTMENT vs. TANZANIA BREWERIES LTD | NATIONAL INVESTMENT vs. AFRIPRISE INVESTMENT PLC |
| KENYA MERCIAL vs. MAENDELEO BANK PLC | KENYA MERCIAL vs. MWALIMU MERCIAL BANK | KENYA MERCIAL vs. SWISSPORT TANZANIA LTD | KENYA MERCIAL vs. NATIONAL INVESTMENT PANY |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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