Correlation Between Premier African and EJF Investments
Can any of the company-specific risk be diversified away by investing in both Premier African and EJF Investments 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 Premier African and EJF Investments into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Premier African Minerals and EJF Investments, you can compare the effects of market volatilities on Premier African and EJF Investments 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 Premier African with a short position of EJF Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of Premier African and EJF Investments.
Diversification Opportunities for Premier African and EJF Investments
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Premier and EJF is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Premier African Minerals and EJF Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EJF Investments and Premier African 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 Premier African Minerals are associated (or correlated) with EJF Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EJF Investments has no effect on the direction of Premier African i.e., Premier African and EJF Investments go up and down completely randomly.
Pair Corralation between Premier African and EJF Investments
Assuming the 90 days trading horizon Premier African Minerals is expected to under-perform the EJF Investments. In addition to that, Premier African is 2.62 times more volatile than EJF Investments. It trades about -0.35 of its total potential returns per unit of risk. EJF Investments is currently generating about -0.01 per unit of volatility. If you would invest 11,900 in EJF Investments on November 7, 2024 and sell it today you would lose (100.00) from holding EJF Investments or give up 0.84% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Premier African Minerals vs. EJF Investments
Performance |
Timeline |
Premier African Minerals |
EJF Investments |
Premier African and EJF Investments Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Premier African and EJF Investments
The main advantage of trading using opposite Premier African and EJF Investments positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Premier African position performs unexpectedly, EJF Investments 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 EJF Investments will offset losses from the drop in EJF Investments' long position.Premier African vs. Atresmedia | Premier African vs. UNIQA Insurance Group | Premier African vs. CAP LEASE AVIATION | Premier African vs. Global Net Lease |
EJF Investments vs. Air Products Chemicals | EJF Investments vs. Alaska Air Group | EJF Investments vs. Sealed Air Corp | EJF Investments vs. Pets at Home |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals |