Correlation Between CONSTANCE HOTELS and AFRICA CLEAN

Can any of the company-specific risk be diversified away by investing in both CONSTANCE HOTELS and AFRICA CLEAN 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 CONSTANCE HOTELS and AFRICA CLEAN into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between CONSTANCE HOTELS SERVICES and AFRICA CLEAN ENERGY, you can compare the effects of market volatilities on CONSTANCE HOTELS and AFRICA CLEAN 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 CONSTANCE HOTELS with a short position of AFRICA CLEAN. Check out your portfolio center. Please also check ongoing floating volatility patterns of CONSTANCE HOTELS and AFRICA CLEAN.

Diversification Opportunities for CONSTANCE HOTELS and AFRICA CLEAN

0.0

Correlation Coefficient

CONSTANCE HOTELS  AFRICA CLEAN

Pay attention - limited upside

The 3 months correlation between CONSTANCE and AFRICA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding CONSTANCE HOTELS SERVICES and AFRICA CLEAN ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AFRICA CLEAN ENERGY and CONSTANCE HOTELS 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 CONSTANCE HOTELS SERVICES are associated (or correlated) with AFRICA CLEAN. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AFRICA CLEAN ENERGY has no effect on the direction of CONSTANCE HOTELS i.e., CONSTANCE HOTELS and AFRICA CLEAN go up and down completely randomly.

Pair Corralation between CONSTANCE HOTELS and AFRICA CLEAN

If you would invest  78.00  in AFRICA CLEAN ENERGY on December 4, 2024 and sell it today you would earn a total of  0.00  from holding AFRICA CLEAN ENERGY or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

CONSTANCE HOTELS SERVICES  vs.  AFRICA CLEAN ENERGY

CONSTANCE HOTELS SERVICES

Risk-Adjusted Performance

Very Weak

Over the last 90 days CONSTANCE HOTELS SERVICES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

AFRICA CLEAN ENERGY

Risk-Adjusted Performance

Very Weak

Over the last 90 days AFRICA CLEAN ENERGY has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, AFRICA CLEAN is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with CONSTANCE HOTELS and AFRICA CLEAN

The main advantage of trading using opposite CONSTANCE HOTELS and AFRICA CLEAN positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CONSTANCE HOTELS position performs unexpectedly, AFRICA CLEAN 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 AFRICA CLEAN will offset losses from the drop in AFRICA CLEAN's long position.

The idea behind CONSTANCE HOTELS SERVICES and AFRICA CLEAN ENERGY 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.

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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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.