Correlation Between AGRICULTURAL DEVELOPMENT and MTN GHANA

Can any of the company-specific risk be diversified away by investing in both AGRICULTURAL DEVELOPMENT and MTN GHANA 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 AGRICULTURAL DEVELOPMENT and MTN GHANA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AGRICULTURAL DEVELOPMENT BANK and MTN GHANA LTD, you can compare the effects of market volatilities on AGRICULTURAL DEVELOPMENT and MTN GHANA 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 AGRICULTURAL DEVELOPMENT with a short position of MTN GHANA. Check out your portfolio center. Please also check ongoing floating volatility patterns of AGRICULTURAL DEVELOPMENT and MTN GHANA.

Diversification Opportunities for AGRICULTURAL DEVELOPMENT and MTN GHANA

0.0

Correlation Coefficient

AGRICULTURAL DEVELOPMENT  MTN GHANA

Pay attention - limited upside

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

Pair Corralation between AGRICULTURAL DEVELOPMENT and MTN GHANA

If you would invest  233.00  in MTN GHANA LTD on September 12, 2024 and sell it today you would earn a total of  4.00  from holding MTN GHANA LTD or generate 1.72% return on investment over 90 days.

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

AGRICULTURAL DEVELOPMENT BANK  vs.  MTN GHANA LTD

AGRICULTURAL DEVELOPMENT

Risk-Adjusted Performance

0 of 100

Very Weak

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

MTN GHANA LTD

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in MTN GHANA LTD are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, MTN GHANA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with AGRICULTURAL DEVELOPMENT and MTN GHANA

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

The idea behind AGRICULTURAL DEVELOPMENT BANK and MTN GHANA LTD 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.