Correlation Between TANZANIA CIGARETTE and KENYA MERCIAL
Can any of the company-specific risk be diversified away by investing in both TANZANIA CIGARETTE and KENYA MERCIAL 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 TANZANIA CIGARETTE and KENYA MERCIAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TANZANIA CIGARETTE LTD and KENYA MERCIAL BANK, you can compare the effects of market volatilities on TANZANIA CIGARETTE and KENYA MERCIAL 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 TANZANIA CIGARETTE with a short position of KENYA MERCIAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of TANZANIA CIGARETTE and KENYA MERCIAL.
Diversification Opportunities for TANZANIA CIGARETTE and KENYA MERCIAL
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TANZANIA and KENYA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TANZANIA CIGARETTE LTD and KENYA MERCIAL BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KENYA MERCIAL BANK and TANZANIA CIGARETTE 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 TANZANIA CIGARETTE LTD are associated (or correlated) with KENYA MERCIAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KENYA MERCIAL BANK has no effect on the direction of TANZANIA CIGARETTE i.e., TANZANIA CIGARETTE and KENYA MERCIAL go up and down completely randomly.
Pair Corralation between TANZANIA CIGARETTE and KENYA MERCIAL
If you would invest 71,000 in KENYA MERCIAL BANK on October 24, 2024 and sell it today you would earn a total of 15,000 from holding KENYA MERCIAL BANK or generate 21.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TANZANIA CIGARETTE LTD vs. KENYA MERCIAL BANK
Performance |
| Timeline |
| TANZANIA CIGARETTE LTD |
| KENYA MERCIAL BANK |
TANZANIA CIGARETTE and KENYA MERCIAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TANZANIA CIGARETTE and KENYA MERCIAL
The main advantage of trading using opposite TANZANIA CIGARETTE and KENYA MERCIAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TANZANIA CIGARETTE position performs unexpectedly, KENYA MERCIAL 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 KENYA MERCIAL will offset losses from the drop in KENYA MERCIAL's long position.| TANZANIA CIGARETTE vs. NATION MEDIA GROUP | TANZANIA CIGARETTE vs. MKOMBOZI MERCIAL BANK | TANZANIA CIGARETTE vs. NATIONAL INVESTMENT PANY | TANZANIA CIGARETTE vs. EAST AFRICAN BREWERIES |
| KENYA MERCIAL vs. NATION MEDIA GROUP | KENYA MERCIAL vs. MKOMBOZI MERCIAL BANK | KENYA MERCIAL vs. NATIONAL INVESTMENT PANY | KENYA MERCIAL vs. EAST AFRICAN BREWERIES |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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