Correlation Between CORONATION INSURANCE and GOLDEN GUINEA
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By analyzing existing cross correlation between CORONATION INSURANCE PLC and GOLDEN GUINEA BREWERIES, you can compare the effects of market volatilities on CORONATION INSURANCE 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 CORONATION INSURANCE with a short position of GOLDEN GUINEA. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORONATION INSURANCE and GOLDEN GUINEA.
Diversification Opportunities for CORONATION INSURANCE and GOLDEN GUINEA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CORONATION and GOLDEN is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding CORONATION INSURANCE PLC 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 CORONATION 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 CORONATION INSURANCE PLC 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 CORONATION INSURANCE i.e., CORONATION INSURANCE and GOLDEN GUINEA go up and down completely randomly.
Pair Corralation between CORONATION INSURANCE and GOLDEN GUINEA
Assuming the 90 days trading horizon CORONATION INSURANCE PLC is expected to generate 1.43 times more return on investment than GOLDEN GUINEA. However, CORONATION INSURANCE is 1.43 times more volatile than GOLDEN GUINEA BREWERIES. It trades about 0.2 of its potential returns per unit of risk. GOLDEN GUINEA BREWERIES is currently generating about -0.31 per unit of risk. If you would invest 230.00 in CORONATION INSURANCE PLC on November 29, 2024 and sell it today you would earn a total of 40.00 from holding CORONATION INSURANCE PLC or generate 17.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CORONATION INSURANCE PLC vs. GOLDEN GUINEA BREWERIES
Performance |
| Timeline |
| CORONATION INSURANCE PLC |
| GOLDEN GUINEA BREWERIES |
CORONATION INSURANCE and GOLDEN GUINEA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CORONATION INSURANCE and GOLDEN GUINEA
The main advantage of trading using opposite CORONATION INSURANCE and GOLDEN GUINEA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORONATION INSURANCE 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.| CORONATION INSURANCE vs. AXAMANSARD INSURANCE PLC | CORONATION INSURANCE vs. ABC TRANSPORT PLC | CORONATION INSURANCE vs. MULTI TREX INTEGRATED FOODS | CORONATION INSURANCE vs. CORNERSTONE INSURANCE 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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