Correlation Between AFROMEDIA PLC and IKEJA HOTELS

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

Diversification Opportunities for AFROMEDIA PLC and IKEJA HOTELS

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between AFROMEDIA PLC and IKEJA HOTELS

If you would invest  1,090  in IKEJA HOTELS PLC on June 1, 2025 and sell it today you would earn a total of  1,205  from holding IKEJA HOTELS PLC or generate 110.55% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

AFROMEDIA PLC  vs.  IKEJA HOTELS PLC

 Performance 
       Timeline  
AFROMEDIA PLC 

Risk-Adjusted Performance

Weakest

 
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.
IKEJA HOTELS PLC 

Risk-Adjusted Performance

Solid

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in IKEJA HOTELS PLC are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent technical and fundamental indicators, IKEJA HOTELS displayed solid returns over the last few months and may actually be approaching a breakup point.

AFROMEDIA PLC and IKEJA HOTELS Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with AFROMEDIA PLC and IKEJA HOTELS

The main advantage of trading using opposite AFROMEDIA PLC and IKEJA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AFROMEDIA PLC position performs unexpectedly, IKEJA HOTELS 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 IKEJA HOTELS will offset losses from the drop in IKEJA HOTELS's long position.
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The idea behind AFROMEDIA PLC and IKEJA HOTELS 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.
IKEJA HOTELS vs. GUINEA INSURANCE PLC
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IKEJA HOTELS vs. SECURE ELECTRONIC TECHNOLOGY
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 Transaction History module to view history of all your transactions and understand their impact on performance.

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