Correlation Between SAFARICOM PLC and HOME AFRIKA
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By analyzing existing cross correlation between SAFARICOM PLC and HOME AFRIKA LTD, you can compare the effects of market volatilities on SAFARICOM PLC and HOME AFRIKA 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 SAFARICOM PLC with a short position of HOME AFRIKA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAFARICOM PLC and HOME AFRIKA.
Diversification Opportunities for SAFARICOM PLC and HOME AFRIKA
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between SAFARICOM and HOME is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding SAFARICOM PLC and HOME AFRIKA LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HOME AFRIKA LTD and SAFARICOM PLC 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 SAFARICOM PLC are associated (or correlated) with HOME AFRIKA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HOME AFRIKA LTD has no effect on the direction of SAFARICOM PLC i.e., SAFARICOM PLC and HOME AFRIKA go up and down completely randomly.
Pair Corralation between SAFARICOM PLC and HOME AFRIKA
Assuming the 90 days trading horizon SAFARICOM PLC is expected to generate 6.0 times less return on investment than HOME AFRIKA. But when comparing it to its historical volatility, SAFARICOM PLC is 3.55 times less risky than HOME AFRIKA. It trades about 0.03 of its potential returns per unit of risk. HOME AFRIKA LTD is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 31.00 in HOME AFRIKA LTD on August 28, 2024 and sell it today you would earn a total of 3.00 from holding HOME AFRIKA LTD or generate 9.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.39% |
| Values | Daily Returns |
SAFARICOM PLC vs. HOME AFRIKA LTD
Performance |
| Timeline |
| SAFARICOM PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Weak
| HOME AFRIKA LTD |
SAFARICOM PLC and HOME AFRIKA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAFARICOM PLC and HOME AFRIKA
The main advantage of trading using opposite SAFARICOM PLC and HOME AFRIKA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAFARICOM PLC position performs unexpectedly, HOME AFRIKA 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 HOME AFRIKA will offset losses from the drop in HOME AFRIKA's long position.| SAFARICOM PLC vs. CIC INSURANCE GROUP | SAFARICOM PLC vs. KENYA RE INSURANCE PORATION | SAFARICOM PLC vs. CO OPERATIVE BANK OF | SAFARICOM PLC vs. CARBACID INVESTMENTS 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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