Correlation Between GUINEA INSURANCE and TOTALENERGIES MARKETING

Can any of the company-specific risk be diversified away by investing in both GUINEA INSURANCE and TOTALENERGIES MARKETING 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 TOTALENERGIES MARKETING 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 TOTALENERGIES MARKETING NIGERIA, you can compare the effects of market volatilities on GUINEA INSURANCE and TOTALENERGIES MARKETING 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 TOTALENERGIES MARKETING. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUINEA INSURANCE and TOTALENERGIES MARKETING.

Diversification Opportunities for GUINEA INSURANCE and TOTALENERGIES MARKETING

-0.02

Correlation Coefficient

GUINEA INSURANCE  TOTALENERGIES MARKETING

Good diversification

The 3 months correlation between GUINEA and TOTALENERGIES is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding GUINEA INSURANCE PLC and TOTALENERGIES MARKETING NIGERI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOTALENERGIES MARKETING 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 TOTALENERGIES MARKETING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOTALENERGIES MARKETING has no effect on the direction of GUINEA INSURANCE i.e., GUINEA INSURANCE and TOTALENERGIES MARKETING go up and down completely randomly.

Pair Corralation between GUINEA INSURANCE and TOTALENERGIES MARKETING

Assuming the 90 days trading horizon GUINEA INSURANCE is expected to generate 1.39 times less return on investment than TOTALENERGIES MARKETING. In addition to that, GUINEA INSURANCE is 3.16 times more volatile than TOTALENERGIES MARKETING NIGERIA. It trades about 0.0 of its total potential returns per unit of risk. TOTALENERGIES MARKETING NIGERIA is currently generating about 0.02 per unit of volatility. If you would invest  67,390  in TOTALENERGIES MARKETING NIGERIA on December 30, 2024 and sell it today you would earn a total of  580.00  from holding TOTALENERGIES MARKETING NIGERIA or generate 0.86% 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.  TOTALENERGIES MARKETING NIGERI

GUINEA INSURANCE PLC

Risk-Adjusted Performance

Very Weak

Over the last 90 days GUINEA INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, GUINEA INSURANCE is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

TOTALENERGIES MARKETING

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in TOTALENERGIES MARKETING NIGERIA are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong basic indicators, TOTALENERGIES MARKETING is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with GUINEA INSURANCE and TOTALENERGIES MARKETING

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

The idea behind GUINEA INSURANCE PLC and TOTALENERGIES MARKETING 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.