Correlation Between INTERNATIONAL BREWERIES and GOLDLINK INSURANCE

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

By analyzing existing cross correlation between INTERNATIONAL BREWERIES PLC and GOLDLINK INSURANCE PLC, you can compare the effects of market volatilities on INTERNATIONAL BREWERIES and GOLDLINK 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 INTERNATIONAL BREWERIES with a short position of GOLDLINK INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERNATIONAL BREWERIES and GOLDLINK INSURANCE.

Diversification Opportunities for INTERNATIONAL BREWERIES and GOLDLINK INSURANCE

0.0

Correlation Coefficient

INTERNATIONAL BREWERIES  GOLDLINK INSURANCE

Pay attention - limited upside

The 3 months correlation between INTERNATIONAL and GOLDLINK is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INTERNATIONAL BREWERIES PLC and GOLDLINK INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GOLDLINK INSURANCE PLC and INTERNATIONAL BREWERIES 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 INTERNATIONAL BREWERIES PLC are associated (or correlated) with GOLDLINK INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GOLDLINK INSURANCE PLC has no effect on the direction of INTERNATIONAL BREWERIES i.e., INTERNATIONAL BREWERIES and GOLDLINK INSURANCE go up and down completely randomly.

Pair Corralation between INTERNATIONAL BREWERIES and GOLDLINK INSURANCE

If you would invest  401.00  in INTERNATIONAL BREWERIES PLC on October 8, 2024 and sell it today you would earn a total of  159.00  from holding INTERNATIONAL BREWERIES PLC or generate 39.65% return on investment over 90 days.

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

INTERNATIONAL BREWERIES PLC  vs.  GOLDLINK INSURANCE PLC

INTERNATIONAL BREWERIES

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in INTERNATIONAL BREWERIES PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain technical and fundamental indicators, INTERNATIONAL BREWERIES showed solid returns over the last few months and may actually be approaching a breakup point.

GOLDLINK INSURANCE PLC

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GOLDLINK INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, GOLDLINK INSURANCE is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with INTERNATIONAL BREWERIES and GOLDLINK INSURANCE

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

The idea behind INTERNATIONAL BREWERIES PLC and GOLDLINK INSURANCE PLC 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.