Correlation Between PLASTIC INDUSTRY and AFREXIMBANK
Can any of the company-specific risk be diversified away by investing in both PLASTIC INDUSTRY and AFREXIMBANK 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 PLASTIC INDUSTRY and AFREXIMBANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PLASTIC INDUSTRY LTD and AFREXIMBANK, you can compare the effects of market volatilities on PLASTIC INDUSTRY and AFREXIMBANK 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 PLASTIC INDUSTRY with a short position of AFREXIMBANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of PLASTIC INDUSTRY and AFREXIMBANK.
Diversification Opportunities for PLASTIC INDUSTRY and AFREXIMBANK
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PLASTIC and AFREXIMBANK is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding PLASTIC INDUSTRY LTD and AFREXIMBANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFREXIMBANK and PLASTIC INDUSTRY 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 PLASTIC INDUSTRY LTD are associated (or correlated) with AFREXIMBANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFREXIMBANK has no effect on the direction of PLASTIC INDUSTRY i.e., PLASTIC INDUSTRY and AFREXIMBANK go up and down completely randomly.
Pair Corralation between PLASTIC INDUSTRY and AFREXIMBANK
Assuming the 90 days trading horizon PLASTIC INDUSTRY LTD is expected to generate 2.2 times more return on investment than AFREXIMBANK. However, PLASTIC INDUSTRY is 2.2 times more volatile than AFREXIMBANK. It trades about 0.1 of its potential returns per unit of risk. AFREXIMBANK is currently generating about 0.0 per unit of risk. If you would invest 4,395 in PLASTIC INDUSTRY LTD on November 4, 2024 and sell it today you would earn a total of 95.00 from holding PLASTIC INDUSTRY LTD or generate 2.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PLASTIC INDUSTRY LTD vs. AFREXIMBANK
Performance |
| Timeline |
| PLASTIC INDUSTRY LTD |
| AFREXIMBANK |
PLASTIC INDUSTRY and AFREXIMBANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PLASTIC INDUSTRY and AFREXIMBANK
The main advantage of trading using opposite PLASTIC INDUSTRY and AFREXIMBANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PLASTIC INDUSTRY position performs unexpectedly, AFREXIMBANK 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 AFREXIMBANK will offset losses from the drop in AFREXIMBANK's long position.| PLASTIC INDUSTRY vs. BEAU VALLON HOSPITAL | PLASTIC INDUSTRY vs. CONSTANCE HOTELS SERVICES | PLASTIC INDUSTRY vs. NATIONAL INVESTMENT TRUST | PLASTIC INDUSTRY vs. MAURITIUS CHEMICAL FERTILIZER |
| AFREXIMBANK vs. FINCORP INVESTMENT LTD | AFREXIMBANK vs. MCB GROUP LIMITED | AFREXIMBANK vs. MCB GROUP LTD | AFREXIMBANK vs. LOTTOTECH 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
Other Complementary Tools
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes |