Correlation Between GUINEA INSURANCE and NIGERIAN BREWERIES
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By analyzing existing cross correlation between GUINEA INSURANCE PLC and NIGERIAN BREWERIES PLC, you can compare the effects of market volatilities on GUINEA INSURANCE and NIGERIAN BREWERIES 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 GUINEA INSURANCE with a short position of NIGERIAN BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUINEA INSURANCE and NIGERIAN BREWERIES.
Diversification Opportunities for GUINEA INSURANCE and NIGERIAN BREWERIES
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between GUINEA and NIGERIAN is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding GUINEA INSURANCE PLC and NIGERIAN BREWERIES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGERIAN BREWERIES PLC and GUINEA INSURANCE 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 GUINEA INSURANCE PLC are associated (or correlated) with NIGERIAN BREWERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGERIAN BREWERIES PLC has no effect on the direction of GUINEA INSURANCE i.e., GUINEA INSURANCE and NIGERIAN BREWERIES go up and down completely randomly.
Pair Corralation between GUINEA INSURANCE and NIGERIAN BREWERIES
Assuming the 90 days trading horizon GUINEA INSURANCE PLC is expected to generate 2.47 times more return on investment than NIGERIAN BREWERIES. However, GUINEA INSURANCE is 2.47 times more volatile than NIGERIAN BREWERIES PLC. It trades about 0.08 of its potential returns per unit of risk. NIGERIAN BREWERIES PLC is currently generating about -0.13 per unit of risk. If you would invest 45.00 in GUINEA INSURANCE PLC on September 3, 2024 and sell it today you would earn a total of 5.00 from holding GUINEA INSURANCE PLC or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GUINEA INSURANCE PLC vs. NIGERIAN BREWERIES PLC
Performance |
| Timeline |
| GUINEA INSURANCE PLC |
| NIGERIAN BREWERIES PLC |
GUINEA INSURANCE and NIGERIAN BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUINEA INSURANCE and NIGERIAN BREWERIES
The main advantage of trading using opposite GUINEA INSURANCE and NIGERIAN BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUINEA INSURANCE position performs unexpectedly, NIGERIAN BREWERIES 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 NIGERIAN BREWERIES will offset losses from the drop in NIGERIAN BREWERIES's long position.| GUINEA INSURANCE vs. MULTI TREX INTEGRATED FOODS | GUINEA INSURANCE vs. FIDELITY BANK PLC | GUINEA INSURANCE vs. GOLDLINK INSURANCE PLC | GUINEA INSURANCE vs. C I LEASING |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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