Correlation Between GOLDEN GUINEA and TRANS NATIONWIDE
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By analyzing existing cross correlation between GOLDEN GUINEA BREWERIES and TRANS NATIONWIDE EXPRESS PLC, you can compare the effects of market volatilities on GOLDEN GUINEA and TRANS NATIONWIDE 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 TRANS NATIONWIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDEN GUINEA and TRANS NATIONWIDE.
Diversification Opportunities for GOLDEN GUINEA and TRANS NATIONWIDE
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between GOLDEN and TRANS is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding GOLDEN GUINEA BREWERIES and TRANS NATIONWIDE EXPRESS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANS NATIONWIDE EXP 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 TRANS NATIONWIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANS NATIONWIDE EXP has no effect on the direction of GOLDEN GUINEA i.e., GOLDEN GUINEA and TRANS NATIONWIDE go up and down completely randomly.
Pair Corralation between GOLDEN GUINEA and TRANS NATIONWIDE
Assuming the 90 days trading horizon GOLDEN GUINEA is expected to generate 4.03 times less return on investment than TRANS NATIONWIDE. But when comparing it to its historical volatility, GOLDEN GUINEA BREWERIES is 1.84 times less risky than TRANS NATIONWIDE. It trades about 0.23 of its potential returns per unit of risk. TRANS NATIONWIDE EXPRESS PLC is currently generating about 0.5 of returns per unit of risk over similar time horizon. If you would invest 138.00 in TRANS NATIONWIDE EXPRESS PLC on October 13, 2024 and sell it today you would earn a total of 62.00 from holding TRANS NATIONWIDE EXPRESS PLC or generate 44.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLDEN GUINEA BREWERIES vs. TRANS NATIONWIDE EXPRESS PLC
Performance |
| Timeline |
| GOLDEN GUINEA BREWERIES |
| TRANS NATIONWIDE EXP |
GOLDEN GUINEA and TRANS NATIONWIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLDEN GUINEA and TRANS NATIONWIDE
The main advantage of trading using opposite GOLDEN GUINEA and TRANS NATIONWIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDEN GUINEA position performs unexpectedly, TRANS NATIONWIDE 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 TRANS NATIONWIDE will offset losses from the drop in TRANS NATIONWIDE's long position.| GOLDEN GUINEA vs. JAIZ BANK PLC | GOLDEN GUINEA vs. STERLING FINANCIAL HOLDINGS | GOLDEN GUINEA vs. DN TYRE RUBBER | GOLDEN GUINEA vs. GOLDLINK INSURANCE PLC |
| TRANS NATIONWIDE vs. INTERNATIONAL BREWERIES PLC | TRANS NATIONWIDE vs. AFRICAN ALLIANCE INSURANCE | TRANS NATIONWIDE vs. GOLDEN GUINEA BREWERIES | TRANS NATIONWIDE vs. DEAP CAPITAL MANAGEMENT |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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