Correlation Between ABC TRANSPORT and GUINEA INSURANCE
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By analyzing existing cross correlation between ABC TRANSPORT PLC and GUINEA INSURANCE PLC, you can compare the effects of market volatilities on ABC TRANSPORT and GUINEA INSURANCE 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 ABC TRANSPORT with a short position of GUINEA INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and GUINEA INSURANCE.
Diversification Opportunities for ABC TRANSPORT and GUINEA INSURANCE
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABC and GUINEA is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and GUINEA INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GUINEA INSURANCE PLC and ABC TRANSPORT 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 ABC TRANSPORT PLC are associated (or correlated) with GUINEA INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GUINEA INSURANCE PLC has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and GUINEA INSURANCE go up and down completely randomly.
Pair Corralation between ABC TRANSPORT and GUINEA INSURANCE
Assuming the 90 days trading horizon ABC TRANSPORT PLC is expected to generate 1.21 times more return on investment than GUINEA INSURANCE. However, ABC TRANSPORT is 1.21 times more volatile than GUINEA INSURANCE PLC. It trades about 0.14 of its potential returns per unit of risk. GUINEA INSURANCE PLC is currently generating about 0.02 per unit of risk. If you would invest 78.00 in ABC TRANSPORT PLC on September 6, 2024 and sell it today you would earn a total of 36.00 from holding ABC TRANSPORT PLC or generate 46.15% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
ABC TRANSPORT PLC vs. GUINEA INSURANCE PLC
Performance |
Timeline |
ABC TRANSPORT PLC |
GUINEA INSURANCE PLC |
ABC TRANSPORT and GUINEA INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ABC TRANSPORT and GUINEA INSURANCE
The main advantage of trading using opposite ABC TRANSPORT and GUINEA INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, GUINEA INSURANCE 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 GUINEA INSURANCE will offset losses from the drop in GUINEA INSURANCE's long position.ABC TRANSPORT vs. SOVEREIGN TRUST INSURANCE | ABC TRANSPORT vs. AFRICAN ALLIANCE INSURANCE | ABC TRANSPORT vs. NEM INSURANCE PLC | ABC TRANSPORT vs. INTERNATIONAL ENERGY INSURANCE |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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