Correlation Between VETIVA S and AIRTEL AFRICA

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

By analyzing existing cross correlation between VETIVA S P and AIRTEL AFRICA PLC, you can compare the effects of market volatilities on VETIVA S and AIRTEL AFRICA 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 VETIVA S with a short position of AIRTEL AFRICA. Check out your portfolio center. Please also check ongoing floating volatility patterns of VETIVA S and AIRTEL AFRICA.

Diversification Opportunities for VETIVA S and AIRTEL AFRICA

0.0

Correlation Coefficient

VETIVA S  AIRTEL AFRICA

Pay attention - limited upside

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

Pair Corralation between VETIVA S and AIRTEL AFRICA

If you would invest  20,701  in VETIVA S P on December 2, 2024 and sell it today you would earn a total of  1,899  from holding VETIVA S P or generate 9.17% return on investment over 90 days.

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

VETIVA S P  vs.  AIRTEL AFRICA PLC

VETIVA S P

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in VETIVA S P are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, VETIVA S exhibited solid returns over the last few months and may actually be approaching a breakup point.

AIRTEL AFRICA PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days AIRTEL AFRICA PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, AIRTEL AFRICA is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with VETIVA S and AIRTEL AFRICA

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

The idea behind VETIVA S P and AIRTEL AFRICA PLC 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.