Correlation Between Rumble and East Africa
Can any of the company-specific risk be diversified away by investing in both Rumble and East Africa 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 Rumble and East Africa into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rumble Inc and East Africa Metals, you can compare the effects of market volatilities on Rumble and East Africa 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 Rumble with a short position of East Africa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rumble and East Africa.
Diversification Opportunities for Rumble and East Africa
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Rumble and East is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Rumble Inc and East Africa Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on East Africa Metals and Rumble 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 Rumble Inc are associated (or correlated) with East Africa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of East Africa Metals has no effect on the direction of Rumble i.e., Rumble and East Africa go up and down completely randomly.
Pair Corralation between Rumble and East Africa
If you would invest 648.00 in Rumble Inc on August 28, 2024 and sell it today you would earn a total of 83.00 from holding Rumble Inc or generate 12.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Rumble Inc vs. East Africa Metals
Performance |
| Timeline |
| Rumble Inc |
| East Africa Metals |
Rumble and East Africa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Rumble and East Africa
The main advantage of trading using opposite Rumble and East Africa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rumble position performs unexpectedly, East Africa 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 East Africa will offset losses from the drop in East Africa's long position.The idea behind Rumble Inc and East Africa Metals 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.| East Africa vs. Ascendant Resources | East Africa vs. Cantex Mine Development | East Africa vs. Amarc Resources | East Africa vs. Sterling Metals Corp |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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