Correlation Between GUINEA INSURANCE and CORNERSTONE INSURANCE
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By analyzing existing cross correlation between GUINEA INSURANCE PLC and CORNERSTONE INSURANCE PLC, you can compare the effects of market volatilities on GUINEA INSURANCE and CORNERSTONE 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 GUINEA INSURANCE with a short position of CORNERSTONE INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUINEA INSURANCE and CORNERSTONE INSURANCE.
Diversification Opportunities for GUINEA INSURANCE and CORNERSTONE INSURANCE
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GUINEA and CORNERSTONE is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding GUINEA INSURANCE PLC and CORNERSTONE INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORNERSTONE INSURANCE 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 CORNERSTONE INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORNERSTONE INSURANCE PLC has no effect on the direction of GUINEA INSURANCE i.e., GUINEA INSURANCE and CORNERSTONE INSURANCE go up and down completely randomly.
Pair Corralation between GUINEA INSURANCE and CORNERSTONE INSURANCE
Assuming the 90 days trading horizon GUINEA INSURANCE is expected to generate 4.25 times less return on investment than CORNERSTONE INSURANCE. In addition to that, GUINEA INSURANCE is 1.21 times more volatile than CORNERSTONE INSURANCE PLC. It trades about 0.02 of its total potential returns per unit of risk. CORNERSTONE INSURANCE PLC is currently generating about 0.11 per unit of volatility. If you would invest 245.00 in CORNERSTONE INSURANCE PLC on September 11, 2024 and sell it today you would earn a total of 58.00 from holding CORNERSTONE INSURANCE PLC or generate 23.67% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
GUINEA INSURANCE PLC vs. CORNERSTONE INSURANCE PLC
Performance |
Timeline |
GUINEA INSURANCE PLC |
CORNERSTONE INSURANCE PLC |
GUINEA INSURANCE and CORNERSTONE INSURANCE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with GUINEA INSURANCE and CORNERSTONE INSURANCE
The main advantage of trading using opposite GUINEA INSURANCE and CORNERSTONE INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUINEA INSURANCE position performs unexpectedly, CORNERSTONE 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 CORNERSTONE INSURANCE will offset losses from the drop in CORNERSTONE INSURANCE's long position.GUINEA INSURANCE vs. SECURE ELECTRONIC TECHNOLOGY | GUINEA INSURANCE vs. AIRTEL AFRICA PLC | GUINEA INSURANCE vs. IKEJA HOTELS PLC | GUINEA INSURANCE vs. VETIVA S P |
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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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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