Correlation Between NATIONAL INVESTMENT and AIRTEL MALAWI
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By analyzing existing cross correlation between NATIONAL INVESTMENT TRUST and AIRTEL MALAWI PLC, you can compare the effects of market volatilities on NATIONAL INVESTMENT and AIRTEL MALAWI 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 AIRTEL MALAWI. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATIONAL INVESTMENT and AIRTEL MALAWI.
Diversification Opportunities for NATIONAL INVESTMENT and AIRTEL MALAWI
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NATIONAL and AIRTEL is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding NATIONAL INVESTMENT TRUST and AIRTEL MALAWI PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIRTEL MALAWI PLC 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 TRUST are associated (or correlated) with AIRTEL MALAWI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIRTEL MALAWI PLC has no effect on the direction of NATIONAL INVESTMENT i.e., NATIONAL INVESTMENT and AIRTEL MALAWI go up and down completely randomly.
Pair Corralation between NATIONAL INVESTMENT and AIRTEL MALAWI
Assuming the 90 days trading horizon NATIONAL INVESTMENT TRUST is expected to generate 0.77 times more return on investment than AIRTEL MALAWI. However, NATIONAL INVESTMENT TRUST is 1.3 times less risky than AIRTEL MALAWI. It trades about 0.14 of its potential returns per unit of risk. AIRTEL MALAWI PLC is currently generating about 0.04 per unit of risk. If you would invest 16,400 in NATIONAL INVESTMENT TRUST on November 2, 2024 and sell it today you would earn a total of 27,602 from holding NATIONAL INVESTMENT TRUST or generate 168.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
NATIONAL INVESTMENT TRUST vs. AIRTEL MALAWI PLC
Performance |
| Timeline |
| NATIONAL INVESTMENT TRUST |
| AIRTEL MALAWI PLC |
NATIONAL INVESTMENT and AIRTEL MALAWI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATIONAL INVESTMENT and AIRTEL MALAWI
The main advantage of trading using opposite NATIONAL INVESTMENT and AIRTEL MALAWI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATIONAL INVESTMENT position performs unexpectedly, AIRTEL MALAWI 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 AIRTEL MALAWI will offset losses from the drop in AIRTEL MALAWI's long position.The idea behind NATIONAL INVESTMENT TRUST and AIRTEL MALAWI PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| AIRTEL MALAWI vs. FDH BANK PLC | AIRTEL MALAWI vs. NATIONAL INVESTMENT TRUST | AIRTEL MALAWI vs. STANDARD BANK LIMITED | AIRTEL MALAWI vs. NBS BANK LIMITED |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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