Correlation Between ABC TRANSPORT and NEM INSURANCE
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By analyzing existing cross correlation between ABC TRANSPORT PLC and NEM INSURANCE PLC, you can compare the effects of market volatilities on ABC TRANSPORT and NEM 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 ABC TRANSPORT with a short position of NEM INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and NEM INSURANCE.
Diversification Opportunities for ABC TRANSPORT and NEM INSURANCE
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABC and NEM is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and NEM INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEM INSURANCE 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 NEM INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEM INSURANCE PLC has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and NEM INSURANCE go up and down completely randomly.
Pair Corralation between ABC TRANSPORT and NEM INSURANCE
Assuming the 90 days trading horizon ABC TRANSPORT PLC is expected to under-perform the NEM INSURANCE. But the stock apears to be less risky and, when comparing its historical volatility, ABC TRANSPORT PLC is 1.31 times less risky than NEM INSURANCE. The stock trades about -0.17 of its potential returns per unit of risk. The NEM INSURANCE PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 1,100 in NEM INSURANCE PLC on October 26, 2024 and sell it today you would earn a total of 105.00 from holding NEM INSURANCE PLC or generate 9.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
ABC TRANSPORT PLC vs. NEM INSURANCE PLC
Performance |
| Timeline |
| ABC TRANSPORT PLC |
| NEM INSURANCE PLC |
ABC TRANSPORT and NEM INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ABC TRANSPORT and NEM INSURANCE
The main advantage of trading using opposite ABC TRANSPORT and NEM INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, NEM 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 NEM INSURANCE will offset losses from the drop in NEM INSURANCE's long position.| ABC TRANSPORT vs. CONSOLIDATED HALLMARK INSURANCE | ABC TRANSPORT vs. ZENITH BANK PLC | ABC TRANSPORT vs. C I LEASING | ABC TRANSPORT vs. JAIZ BANK PLC |
| NEM INSURANCE vs. ABC TRANSPORT PLC | NEM INSURANCE vs. AFRICAN ALLIANCE INSURANCE | NEM INSURANCE vs. ZENITH BANK PLC | NEM INSURANCE vs. CUSTODIAN INVESTMENT 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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