Correlation Between SOVEREIGN TRUST and GOLDEN GUINEA
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By analyzing existing cross correlation between SOVEREIGN TRUST INSURANCE and GOLDEN GUINEA BREWERIES, you can compare the effects of market volatilities on SOVEREIGN TRUST 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 SOVEREIGN TRUST with a short position of GOLDEN GUINEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of SOVEREIGN TRUST and GOLDEN GUINEA.
Diversification Opportunities for SOVEREIGN TRUST and GOLDEN GUINEA
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between SOVEREIGN and GOLDEN is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SOVEREIGN TRUST INSURANCE 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 SOVEREIGN TRUST 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 SOVEREIGN TRUST INSURANCE 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 SOVEREIGN TRUST i.e., SOVEREIGN TRUST and GOLDEN GUINEA go up and down completely randomly.
Pair Corralation between SOVEREIGN TRUST and GOLDEN GUINEA
Assuming the 90 days trading horizon SOVEREIGN TRUST is expected to generate 1.64 times less return on investment than GOLDEN GUINEA. In addition to that, SOVEREIGN TRUST is 2.49 times more volatile than GOLDEN GUINEA BREWERIES. It trades about 0.05 of its total potential returns per unit of risk. GOLDEN GUINEA BREWERIES is currently generating about 0.21 per unit of volatility. 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 | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.48% |
| Values | Daily Returns |
SOVEREIGN TRUST INSURANCE vs. GOLDEN GUINEA BREWERIES
Performance |
| Timeline |
| SOVEREIGN TRUST INSURANCE |
| GOLDEN GUINEA BREWERIES |
SOVEREIGN TRUST and GOLDEN GUINEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SOVEREIGN TRUST and GOLDEN GUINEA
The main advantage of trading using opposite SOVEREIGN TRUST and GOLDEN GUINEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SOVEREIGN TRUST 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.| SOVEREIGN TRUST vs. SECURE ELECTRONIC TECHNOLOGY | SOVEREIGN TRUST vs. VFD GROUP | SOVEREIGN TRUST vs. AFROMEDIA PLC | SOVEREIGN TRUST vs. DEAP CAPITAL MANAGEMENT |
| GOLDEN GUINEA vs. ZENITH BANK PLC | GOLDEN GUINEA vs. NEM INSURANCE PLC | GOLDEN GUINEA vs. AIICO INSURANCE PLC | GOLDEN GUINEA vs. UNITY BANK PLC |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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