Correlation Between AIICO INSURANCE and NIGERIAN BREWERIES
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By analyzing existing cross correlation between AIICO INSURANCE PLC and NIGERIAN BREWERIES PLC, you can compare the effects of market volatilities on AIICO INSURANCE 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 AIICO INSURANCE with a short position of NIGERIAN BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIICO INSURANCE and NIGERIAN BREWERIES.
Diversification Opportunities for AIICO INSURANCE and NIGERIAN BREWERIES
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between AIICO and NIGERIAN is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding AIICO INSURANCE 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 AIICO 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 AIICO INSURANCE 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 AIICO INSURANCE i.e., AIICO INSURANCE and NIGERIAN BREWERIES go up and down completely randomly.
Pair Corralation between AIICO INSURANCE and NIGERIAN BREWERIES
Assuming the 90 days trading horizon AIICO INSURANCE PLC is expected to generate 1.2 times more return on investment than NIGERIAN BREWERIES. However, AIICO INSURANCE is 1.2 times more volatile than NIGERIAN BREWERIES PLC. It trades about 0.06 of its potential returns per unit of risk. NIGERIAN BREWERIES PLC is currently generating about -0.01 per unit of risk. If you would invest 55.00 in AIICO INSURANCE PLC on September 3, 2024 and sell it today you would earn a total of 65.00 from holding AIICO INSURANCE PLC or generate 118.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AIICO INSURANCE PLC vs. NIGERIAN BREWERIES PLC
Performance |
| Timeline |
| AIICO INSURANCE PLC |
| NIGERIAN BREWERIES PLC |
AIICO INSURANCE and NIGERIAN BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIICO INSURANCE and NIGERIAN BREWERIES
The main advantage of trading using opposite AIICO INSURANCE and NIGERIAN BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIICO INSURANCE 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.| AIICO INSURANCE vs. GUINEA INSURANCE PLC | AIICO INSURANCE vs. SECURE ELECTRONIC TECHNOLOGY | AIICO INSURANCE vs. AIRTEL AFRICA PLC | AIICO INSURANCE vs. VFD GROUP |
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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