Correlation Between CHAMPION BREWERIES and CORNERSTONE INSURANCE
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By analyzing existing cross correlation between CHAMPION BREWERIES PLC and CORNERSTONE INSURANCE PLC, you can compare the effects of market volatilities on CHAMPION BREWERIES and CORNERSTONE INSURANCE 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 CHAMPION BREWERIES with a short position of CORNERSTONE INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAMPION BREWERIES and CORNERSTONE INSURANCE.
Diversification Opportunities for CHAMPION BREWERIES and CORNERSTONE INSURANCE
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHAMPION and CORNERSTONE is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding CHAMPION BREWERIES PLC and CORNERSTONE INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNERSTONE INSURANCE PLC and CHAMPION BREWERIES 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 CHAMPION BREWERIES PLC are associated (or correlated) with CORNERSTONE INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNERSTONE INSURANCE PLC has no effect on the direction of CHAMPION BREWERIES i.e., CHAMPION BREWERIES and CORNERSTONE INSURANCE go up and down completely randomly.
Pair Corralation between CHAMPION BREWERIES and CORNERSTONE INSURANCE
Assuming the 90 days trading horizon CHAMPION BREWERIES PLC is expected to generate 0.53 times more return on investment than CORNERSTONE INSURANCE. However, CHAMPION BREWERIES PLC is 1.88 times less risky than CORNERSTONE INSURANCE. It trades about -0.01 of its potential returns per unit of risk. CORNERSTONE INSURANCE PLC is currently generating about -0.28 per unit of risk. If you would invest 400.00 in CHAMPION BREWERIES PLC on November 5, 2024 and sell it today you would lose (5.00) from holding CHAMPION BREWERIES PLC or give up 1.25% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHAMPION BREWERIES PLC vs. CORNERSTONE INSURANCE PLC
Performance |
| Timeline |
| CHAMPION BREWERIES PLC |
| CORNERSTONE INSURANCE PLC |
CHAMPION BREWERIES and CORNERSTONE INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAMPION BREWERIES and CORNERSTONE INSURANCE
The main advantage of trading using opposite CHAMPION BREWERIES and CORNERSTONE INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAMPION BREWERIES position performs unexpectedly, CORNERSTONE INSURANCE 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 CORNERSTONE INSURANCE will offset losses from the drop in CORNERSTONE INSURANCE's long position.| CHAMPION BREWERIES vs. CORNERSTONE INSURANCE PLC | CHAMPION BREWERIES vs. MULTI TREX INTEGRATED FOODS | CHAMPION BREWERIES vs. NIGERIAN BREWERIES PLC | CHAMPION BREWERIES vs. BUA FOODS 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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