Correlation Between BUA FOODS and GOLDEN GUINEA
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By analyzing existing cross correlation between BUA FOODS PLC and GOLDEN GUINEA BREWERIES, you can compare the effects of market volatilities on BUA FOODS and GOLDEN GUINEA 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 BUA FOODS with a short position of GOLDEN GUINEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BUA FOODS and GOLDEN GUINEA.
Diversification Opportunities for BUA FOODS and GOLDEN GUINEA
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between BUA and GOLDEN is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding BUA FOODS PLC and GOLDEN GUINEA BREWERIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDEN GUINEA BREWERIES and BUA FOODS 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 BUA FOODS PLC are associated (or correlated) with GOLDEN GUINEA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDEN GUINEA BREWERIES has no effect on the direction of BUA FOODS i.e., BUA FOODS and GOLDEN GUINEA go up and down completely randomly.
Pair Corralation between BUA FOODS and GOLDEN GUINEA
Assuming the 90 days trading horizon BUA FOODS is expected to generate 1.39 times less return on investment than GOLDEN GUINEA. But when comparing it to its historical volatility, BUA FOODS PLC is 1.41 times less risky than GOLDEN GUINEA. It trades about 0.22 of its potential returns per unit of risk. GOLDEN GUINEA BREWERIES is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 89.00 in GOLDEN GUINEA BREWERIES on August 31, 2024 and sell it today you would earn a total of 281.00 from holding GOLDEN GUINEA BREWERIES or generate 315.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 93.73% |
| Values | Daily Returns |
BUA FOODS PLC vs. GOLDEN GUINEA BREWERIES
Performance |
| Timeline |
| BUA FOODS PLC |
| GOLDEN GUINEA BREWERIES |
BUA FOODS and GOLDEN GUINEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BUA FOODS and GOLDEN GUINEA
The main advantage of trading using opposite BUA FOODS and GOLDEN GUINEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BUA FOODS position performs unexpectedly, GOLDEN GUINEA 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 GOLDEN GUINEA will offset losses from the drop in GOLDEN GUINEA's long position.| BUA FOODS vs. SOVEREIGN TRUST INSURANCE | BUA FOODS vs. AFRICAN ALLIANCE INSURANCE | BUA FOODS vs. STANDARD ALLIANCE INSURANCE | BUA FOODS vs. TRANSCORP HOTELS PLC |
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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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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