Correlation Between WEMA BANK and GOLDEN GUINEA

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

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

Diversification Opportunities for WEMA BANK and GOLDEN GUINEA

0.0

Correlation Coefficient

WEMA BANK  GOLDEN GUINEA

Pay attention - limited upside

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

Pair Corralation between WEMA BANK and GOLDEN GUINEA

If you would invest  1,355  in WEMA BANK PLC on May 6, 2025 and sell it today you would earn a total of  1,035  from holding WEMA BANK PLC or generate 76.38% return on investment over 90 days.

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

WEMA BANK PLC  vs.  GOLDEN GUINEA BREWERIES

WEMA BANK PLC

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in WEMA BANK PLC are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, WEMA BANK displayed solid returns over the last few months and may actually be approaching a breakup point.

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 rather sound technical and fundamental indicators, GOLDEN GUINEA is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with WEMA BANK and GOLDEN GUINEA

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

The idea behind WEMA BANK PLC and GOLDEN GUINEA BREWERIES 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 Global Correlations module to find global opportunities by holding instruments from different markets.