Correlation Between GOLDEN GUINEA and THOMAS WYATT

Can any of the company-specific risk be diversified away by investing in both GOLDEN GUINEA and THOMAS WYATT at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining GOLDEN GUINEA and THOMAS WYATT into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GOLDEN GUINEA BREWERIES and THOMAS WYATT NIGERIA, you can compare the effects of market volatilities on GOLDEN GUINEA and THOMAS WYATT 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 THOMAS WYATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLDEN GUINEA and THOMAS WYATT.

Diversification Opportunities for GOLDEN GUINEA and THOMAS WYATT

0.58

Correlation Coefficient

GOLDEN GUINEA  THOMAS WYATT

Very weak diversification

The 3 months correlation between GOLDEN and THOMAS is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding GOLDEN GUINEA BREWERIES and THOMAS WYATT NIGERIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on THOMAS WYATT NIGERIA 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 THOMAS WYATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of THOMAS WYATT NIGERIA has no effect on the direction of GOLDEN GUINEA i.e., GOLDEN GUINEA and THOMAS WYATT go up and down completely randomly.

Pair Corralation between GOLDEN GUINEA and THOMAS WYATT

Assuming the 90 days trading horizon GOLDEN GUINEA BREWERIES is expected to under-perform the THOMAS WYATT. But the stock apears to be less risky and, when comparing its historical volatility, GOLDEN GUINEA BREWERIES is 1.72 times less risky than THOMAS WYATT. The stock trades about -0.18 of its potential returns per unit of risk. The THOMAS WYATT NIGERIA is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  171.00  in THOMAS WYATT NIGERIA on December 27, 2024 and sell it today you would earn a total of  14.00  from holding THOMAS WYATT NIGERIA or generate 8.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

GOLDEN GUINEA BREWERIES  vs.  THOMAS WYATT NIGERIA

GOLDEN GUINEA BREWERIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days GOLDEN GUINEA BREWERIES has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

THOMAS WYATT NIGERIA

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in THOMAS WYATT NIGERIA are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, THOMAS WYATT may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with GOLDEN GUINEA and THOMAS WYATT

The main advantage of trading using opposite GOLDEN GUINEA and THOMAS WYATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLDEN GUINEA position performs unexpectedly, THOMAS WYATT 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 THOMAS WYATT will offset losses from the drop in THOMAS WYATT's long position.

The idea behind GOLDEN GUINEA BREWERIES and THOMAS WYATT NIGERIA pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.