Correlation Between GUINEA INSURANCE and GREENWICH ASSET

Can any of the company-specific risk be diversified away by investing in both GUINEA INSURANCE and GREENWICH ASSET 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 GUINEA INSURANCE and GREENWICH ASSET into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between GUINEA INSURANCE PLC and GREENWICH ASSET ETF, you can compare the effects of market volatilities on GUINEA INSURANCE and GREENWICH ASSET 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 GREENWICH ASSET. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUINEA INSURANCE and GREENWICH ASSET.

Diversification Opportunities for GUINEA INSURANCE and GREENWICH ASSET

-0.37

Correlation Coefficient

GUINEA INSURANCE  GREENWICH ASSET

Very good diversification

The 3 months correlation between GUINEA and GREENWICH is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding GUINEA INSURANCE PLC and GREENWICH ASSET ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GREENWICH ASSET ETF 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 GREENWICH ASSET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GREENWICH ASSET ETF has no effect on the direction of GUINEA INSURANCE i.e., GUINEA INSURANCE and GREENWICH ASSET go up and down completely randomly.

Pair Corralation between GUINEA INSURANCE and GREENWICH ASSET

Assuming the 90 days trading horizon GUINEA INSURANCE PLC is expected to generate 1.83 times more return on investment than GREENWICH ASSET. However, GUINEA INSURANCE is 1.83 times more volatile than GREENWICH ASSET ETF. It trades about 0.09 of its potential returns per unit of risk. GREENWICH ASSET ETF is currently generating about 0.01 per unit of risk. If you would invest  51.00  in GUINEA INSURANCE PLC on December 2, 2024 and sell it today you would earn a total of  13.00  from holding GUINEA INSURANCE PLC or generate 25.49% return on investment over 90 days.

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

GUINEA INSURANCE PLC  vs.  GREENWICH ASSET ETF

GUINEA INSURANCE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in GUINEA INSURANCE PLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, GUINEA INSURANCE demonstrated solid returns over the last few months and may actually be approaching a breakup point.

GREENWICH ASSET ETF

Risk-Adjusted Performance

Very Weak

Over the last 90 days GREENWICH ASSET ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, GREENWICH ASSET is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with GUINEA INSURANCE and GREENWICH ASSET

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

The idea behind GUINEA INSURANCE PLC and GREENWICH ASSET ETF 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.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.