Correlation Between AFRICA CLEAN and MCB GROUP

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

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

Diversification Opportunities for AFRICA CLEAN and MCB GROUP

0.0

Correlation Coefficient

AFRICA CLEAN  MCB GROUP

Pay attention - limited upside

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

Pair Corralation between AFRICA CLEAN and MCB GROUP

If you would invest  44,200  in MCB GROUP LIMITED on September 15, 2024 and sell it today you would earn a total of  100.00  from holding MCB GROUP LIMITED or generate 0.23% return on investment over 90 days.

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

AFRICA CLEAN ENERGY  vs.  MCB GROUP LIMITED

AFRICA CLEAN ENERGY

Risk-Adjusted Performance

0 of 100

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.

MCB GROUP LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with AFRICA CLEAN and MCB GROUP

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

The idea behind AFRICA CLEAN ENERGY and MCB GROUP LIMITED 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.