Correlation Between NATION MEDIA and CRDB BANK
Can any of the company-specific risk be diversified away by investing in both NATION MEDIA and CRDB BANK 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 NATION MEDIA and CRDB BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NATION MEDIA GROUP and CRDB BANK LTD, you can compare the effects of market volatilities on NATION MEDIA and CRDB BANK 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 NATION MEDIA with a short position of CRDB BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATION MEDIA and CRDB BANK.
Diversification Opportunities for NATION MEDIA and CRDB BANK
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between NATION and CRDB is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding NATION MEDIA GROUP and CRDB BANK LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CRDB BANK LTD and NATION MEDIA 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 NATION MEDIA GROUP are associated (or correlated) with CRDB BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CRDB BANK LTD has no effect on the direction of NATION MEDIA i.e., NATION MEDIA and CRDB BANK go up and down completely randomly.
Pair Corralation between NATION MEDIA and CRDB BANK
Assuming the 90 days trading horizon NATION MEDIA GROUP is expected to generate 7.73 times more return on investment than CRDB BANK. However, NATION MEDIA is 7.73 times more volatile than CRDB BANK LTD. It trades about 0.04 of its potential returns per unit of risk. CRDB BANK LTD is currently generating about 0.0 per unit of risk. If you would invest 24,500 in NATION MEDIA GROUP on October 25, 2024 and sell it today you would earn a total of 500.00 from holding NATION MEDIA GROUP or generate 2.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.0% |
| Values | Daily Returns |
NATION MEDIA GROUP vs. CRDB BANK LTD
Performance |
| Timeline |
| NATION MEDIA GROUP |
| CRDB BANK LTD |
NATION MEDIA and CRDB BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATION MEDIA and CRDB BANK
The main advantage of trading using opposite NATION MEDIA and CRDB BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATION MEDIA position performs unexpectedly, CRDB BANK 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 CRDB BANK will offset losses from the drop in CRDB BANK's long position.| NATION MEDIA vs. AFRIPRISE INVESTMENT PLC | NATION MEDIA vs. EAST AFRICAN BREWERIES | NATION MEDIA vs. NATIONAL MICROFINANCE BANK | NATION MEDIA vs. TANZANIA CIGARETTE LTD |
| CRDB BANK vs. YETU MICROFINANCE PLC | CRDB BANK vs. MUCOBA BANK PLC | CRDB BANK vs. TANZANIA PORTLAND CEMENT | CRDB BANK vs. TOL GASES LTD |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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