Correlation Between STAR AFRICA and FIRST MUTUAL
Can any of the company-specific risk be diversified away by investing in both STAR AFRICA and FIRST MUTUAL 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 STAR AFRICA and FIRST MUTUAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STAR AFRICA PORATION and FIRST MUTUAL PROPERTIES, you can compare the effects of market volatilities on STAR AFRICA and FIRST MUTUAL 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 STAR AFRICA with a short position of FIRST MUTUAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of STAR AFRICA and FIRST MUTUAL.
Diversification Opportunities for STAR AFRICA and FIRST MUTUAL
-0.79 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between STAR and FIRST is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding STAR AFRICA PORATION and FIRST MUTUAL PROPERTIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FIRST MUTUAL PROPERTIES and STAR AFRICA 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 STAR AFRICA PORATION are associated (or correlated) with FIRST MUTUAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FIRST MUTUAL PROPERTIES has no effect on the direction of STAR AFRICA i.e., STAR AFRICA and FIRST MUTUAL go up and down completely randomly.
Pair Corralation between STAR AFRICA and FIRST MUTUAL
Assuming the 90 days trading horizon STAR AFRICA is expected to generate 2.58 times less return on investment than FIRST MUTUAL. In addition to that, STAR AFRICA is 1.32 times more volatile than FIRST MUTUAL PROPERTIES. It trades about 0.08 of its total potential returns per unit of risk. FIRST MUTUAL PROPERTIES is currently generating about 0.28 per unit of volatility. If you would invest 9,495 in FIRST MUTUAL PROPERTIES on December 30, 2024 and sell it today you would earn a total of 1,849 from holding FIRST MUTUAL PROPERTIES or generate 19.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STAR AFRICA PORATION vs. FIRST MUTUAL PROPERTIES
Performance |
| Timeline |
| STAR AFRICA PORATION |
| FIRST MUTUAL PROPERTIES |
STAR AFRICA and FIRST MUTUAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STAR AFRICA and FIRST MUTUAL
The main advantage of trading using opposite STAR AFRICA and FIRST MUTUAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STAR AFRICA position performs unexpectedly, FIRST MUTUAL 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 FIRST MUTUAL will offset losses from the drop in FIRST MUTUAL's long position.| STAR AFRICA vs. TANGANDA TEA PANY | ||
| STAR AFRICA vs. WILLDALE LIMITED | ||
| STAR AFRICA vs. DAIRIBORD HOLDINGS LIMITED | ||
| STAR AFRICA vs. Revitus Property Opportunities |
| FIRST MUTUAL vs. TANGANDA TEA PANY | ||
| FIRST MUTUAL vs. WILLDALE LIMITED | ||
| FIRST MUTUAL vs. DAIRIBORD HOLDINGS LIMITED | ||
| FIRST MUTUAL vs. Revitus Property Opportunities |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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