Correlation Between GOLDEN GUINEA and CAP PLC

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

Diversification Opportunities for GOLDEN GUINEA and CAP PLC

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between GOLDEN GUINEA and CAP PLC

If you would invest  315.00  in GOLDEN GUINEA BREWERIES on September 12, 2024 and sell it today you would earn a total of  338.00  from holding GOLDEN GUINEA BREWERIES or generate 107.3% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

GOLDEN GUINEA BREWERIES  vs.  CAP PLC

 Performance 
       Timeline  
GOLDEN GUINEA BREWERIES 

Risk-Adjusted Performance

29 of 100

 
Weak
 
Strong
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in GOLDEN GUINEA BREWERIES are ranked lower than 29 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent technical and fundamental indicators, GOLDEN GUINEA exhibited solid returns over the last few months and may actually be approaching a breakup point.
CAP PLC 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
OK
Over the last 90 days CAP PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, CAP PLC is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

GOLDEN GUINEA and CAP PLC Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with GOLDEN GUINEA and CAP PLC

The main advantage of trading using opposite GOLDEN GUINEA and CAP PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDEN GUINEA position performs unexpectedly, CAP PLC 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 CAP PLC will offset losses from the drop in CAP PLC's long position.
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The idea behind GOLDEN GUINEA BREWERIES and CAP 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.
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.

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