Correlation Between AFROMEDIA PLC and ECOBANK TRANSNATIONAL

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Can any of the company-specific risk be diversified away by investing in both AFROMEDIA PLC and ECOBANK TRANSNATIONAL 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 AFROMEDIA PLC and ECOBANK TRANSNATIONAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AFROMEDIA PLC and ECOBANK TRANSNATIONAL INCORPORATED, you can compare the effects of market volatilities on AFROMEDIA PLC and ECOBANK TRANSNATIONAL 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 AFROMEDIA PLC with a short position of ECOBANK TRANSNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of AFROMEDIA PLC and ECOBANK TRANSNATIONAL.

Diversification Opportunities for AFROMEDIA PLC and ECOBANK TRANSNATIONAL

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between AFROMEDIA PLC and ECOBANK TRANSNATIONAL

If you would invest  2,925  in ECOBANK TRANSNATIONAL INCORPORATED on April 19, 2025 and sell it today you would earn a total of  575.00  from holding ECOBANK TRANSNATIONAL INCORPORATED or generate 19.66% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

AFROMEDIA PLC  vs.  ECOBANK TRANSNATIONAL INCORPOR

 Performance 
       Timeline  
AFROMEDIA PLC 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days AFROMEDIA PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound forward indicators, AFROMEDIA PLC is not utilizing all of its potentials. The recent stock price tumult, may contribute to shorter-term losses for the shareholders.
ECOBANK TRANSNATIONAL 

Risk-Adjusted Performance

OK

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in ECOBANK TRANSNATIONAL INCORPORATED are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent basic indicators, ECOBANK TRANSNATIONAL unveiled solid returns over the last few months and may actually be approaching a breakup point.

AFROMEDIA PLC and ECOBANK TRANSNATIONAL Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AFROMEDIA PLC and ECOBANK TRANSNATIONAL

The main advantage of trading using opposite AFROMEDIA PLC and ECOBANK TRANSNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFROMEDIA PLC position performs unexpectedly, ECOBANK TRANSNATIONAL 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 ECOBANK TRANSNATIONAL will offset losses from the drop in ECOBANK TRANSNATIONAL's long position.
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The idea behind AFROMEDIA PLC and ECOBANK TRANSNATIONAL INCORPORATED 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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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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.

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