Correlation Between ABC TRANSPORT and NIGERIAN BREWERIES
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By analyzing existing cross correlation between ABC TRANSPORT PLC and NIGERIAN BREWERIES PLC, you can compare the effects of market volatilities on ABC TRANSPORT and NIGERIAN BREWERIES 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 ABC TRANSPORT with a short position of NIGERIAN BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and NIGERIAN BREWERIES.
Diversification Opportunities for ABC TRANSPORT and NIGERIAN BREWERIES
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ABC and NIGERIAN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and NIGERIAN BREWERIES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGERIAN BREWERIES PLC and ABC TRANSPORT 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 ABC TRANSPORT PLC are associated (or correlated) with NIGERIAN BREWERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGERIAN BREWERIES PLC has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and NIGERIAN BREWERIES go up and down completely randomly.
Pair Corralation between ABC TRANSPORT and NIGERIAN BREWERIES
Assuming the 90 days trading horizon ABC TRANSPORT is expected to generate 2.27 times less return on investment than NIGERIAN BREWERIES. In addition to that, ABC TRANSPORT is 2.39 times more volatile than NIGERIAN BREWERIES PLC. It trades about 0.0 of its total potential returns per unit of risk. NIGERIAN BREWERIES PLC is currently generating about 0.02 per unit of volatility. If you would invest 2,700 in NIGERIAN BREWERIES PLC on September 12, 2024 and sell it today you would earn a total of 15.00 from holding NIGERIAN BREWERIES PLC or generate 0.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABC TRANSPORT PLC vs. NIGERIAN BREWERIES PLC
Performance |
| Timeline |
| ABC TRANSPORT PLC |
| NIGERIAN BREWERIES PLC |
ABC TRANSPORT and NIGERIAN BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABC TRANSPORT and NIGERIAN BREWERIES
The main advantage of trading using opposite ABC TRANSPORT and NIGERIAN BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, NIGERIAN BREWERIES 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 NIGERIAN BREWERIES will offset losses from the drop in NIGERIAN BREWERIES's long position.| ABC TRANSPORT vs. GUINEA INSURANCE PLC | ABC TRANSPORT vs. SECURE ELECTRONIC TECHNOLOGY | ABC TRANSPORT vs. VFD GROUP | ABC TRANSPORT vs. IKEJA HOTELS PLC |
| NIGERIAN BREWERIES vs. GUINEA INSURANCE PLC | NIGERIAN BREWERIES vs. SECURE ELECTRONIC TECHNOLOGY | NIGERIAN BREWERIES vs. VFD GROUP | NIGERIAN BREWERIES vs. IKEJA HOTELS PLC |
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 CEOs Directory module to screen CEOs from public companies around the world.
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