Correlation Between ECOBANK GHANA and ACCESS BANK

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

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

Diversification Opportunities for ECOBANK GHANA and ACCESS BANK

0.46

Correlation Coefficient

ECOBANK GHANA  ACCESS BANK

Very weak diversification

The 3 months correlation between ECOBANK and ACCESS is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding ECOBANK GHANA LIMITED and ACCESS BANK GHANA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ACCESS BANK GHANA and ECOBANK GHANA 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 ECOBANK GHANA LIMITED are associated (or correlated) with ACCESS BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ACCESS BANK GHANA has no effect on the direction of ECOBANK GHANA i.e., ECOBANK GHANA and ACCESS BANK go up and down completely randomly.

Pair Corralation between ECOBANK GHANA and ACCESS BANK

If you would invest  610.00  in ECOBANK GHANA LIMITED on September 12, 2024 and sell it today you would earn a total of  40.00  from holding ECOBANK GHANA LIMITED or generate 6.56% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

ECOBANK GHANA LIMITED  vs.  ACCESS BANK GHANA

ECOBANK GHANA LIMITED

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in ECOBANK GHANA LIMITED are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, ECOBANK GHANA may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ACCESS BANK GHANA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCESS BANK GHANA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, ACCESS BANK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with ECOBANK GHANA and ACCESS BANK

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

The idea behind ECOBANK GHANA LIMITED and ACCESS BANK GHANA 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.