Correlation Between MALAWI PROPERTY and FDH BANK
Can any of the company-specific risk be diversified away by investing in both MALAWI PROPERTY and FDH BANK 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 MALAWI PROPERTY and FDH BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MALAWI PROPERTY INVESTMENT and FDH BANK PLC, you can compare the effects of market volatilities on MALAWI PROPERTY and FDH BANK 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 MALAWI PROPERTY with a short position of FDH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of MALAWI PROPERTY and FDH BANK.
Diversification Opportunities for MALAWI PROPERTY and FDH BANK
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between MALAWI and FDH is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding MALAWI PROPERTY INVESTMENT and FDH BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDH BANK PLC and MALAWI PROPERTY 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 MALAWI PROPERTY INVESTMENT are associated (or correlated) with FDH BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDH BANK PLC has no effect on the direction of MALAWI PROPERTY i.e., MALAWI PROPERTY and FDH BANK go up and down completely randomly.
Pair Corralation between MALAWI PROPERTY and FDH BANK
Assuming the 90 days trading horizon MALAWI PROPERTY is expected to generate 31.44 times less return on investment than FDH BANK. But when comparing it to its historical volatility, MALAWI PROPERTY INVESTMENT is 11.6 times less risky than FDH BANK. It trades about 0.13 of its potential returns per unit of risk. FDH BANK PLC is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest 14,823 in FDH BANK PLC on December 30, 2024 and sell it today you would earn a total of 16,696 from holding FDH BANK PLC or generate 112.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
MALAWI PROPERTY INVESTMENT vs. FDH BANK PLC
Performance |
Timeline |
MALAWI PROPERTY INVE |
FDH BANK PLC |
MALAWI PROPERTY and FDH BANK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with MALAWI PROPERTY and FDH BANK
The main advantage of trading using opposite MALAWI PROPERTY and FDH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MALAWI PROPERTY position performs unexpectedly, FDH BANK 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 FDH BANK will offset losses from the drop in FDH BANK's long position.MALAWI PROPERTY vs. SUNBIRD HOTELS TOURISM | MALAWI PROPERTY vs. STANDARD BANK LIMITED | MALAWI PROPERTY vs. BLANTYRE HOTELS LIMITED | MALAWI PROPERTY vs. NATIONAL BANK OF |
FDH BANK vs. NATIONAL INVESTMENT TRUST | FDH BANK vs. NATIONAL BANK OF | FDH BANK vs. STANDARD BANK LIMITED | FDH BANK vs. MALAWI PROPERTY INVESTMENT |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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