Correlation Between BUA FOODS and JAIZ BANK
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By analyzing existing cross correlation between BUA FOODS PLC and JAIZ BANK PLC, you can compare the effects of market volatilities on BUA FOODS and JAIZ BANK 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 BUA FOODS with a short position of JAIZ BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of BUA FOODS and JAIZ BANK.
Diversification Opportunities for BUA FOODS and JAIZ BANK
Very poor diversification
The 3 months correlation between BUA and JAIZ is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding BUA FOODS PLC and JAIZ BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JAIZ BANK PLC and BUA FOODS 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 BUA FOODS PLC are associated (or correlated) with JAIZ BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JAIZ BANK PLC has no effect on the direction of BUA FOODS i.e., BUA FOODS and JAIZ BANK go up and down completely randomly.
Pair Corralation between BUA FOODS and JAIZ BANK
Assuming the 90 days trading horizon BUA FOODS PLC is expected to generate 0.49 times more return on investment than JAIZ BANK. However, BUA FOODS PLC is 2.04 times less risky than JAIZ BANK. It trades about 0.23 of its potential returns per unit of risk. JAIZ BANK PLC is currently generating about 0.02 per unit of risk. If you would invest 39,490 in BUA FOODS PLC on October 26, 2024 and sell it today you would earn a total of 2,010 from holding BUA FOODS PLC or generate 5.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
BUA FOODS PLC vs. JAIZ BANK PLC
Performance |
| Timeline |
| BUA FOODS PLC |
| JAIZ BANK PLC |
BUA FOODS and JAIZ BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BUA FOODS and JAIZ BANK
The main advantage of trading using opposite BUA FOODS and JAIZ BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BUA FOODS position performs unexpectedly, JAIZ BANK 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 JAIZ BANK will offset losses from the drop in JAIZ BANK's long position.| BUA FOODS vs. AFRICAN ALLIANCE INSURANCE | BUA FOODS vs. UNITY BANK PLC | BUA FOODS vs. IKEJA HOTELS PLC | BUA FOODS vs. CUSTODIAN INVESTMENT PLC |
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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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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