Correlation Between CHAMPION BREWERIES and NEM INSURANCE
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By analyzing existing cross correlation between CHAMPION BREWERIES PLC and NEM INSURANCE PLC, you can compare the effects of market volatilities on CHAMPION BREWERIES 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 CHAMPION BREWERIES with a short position of NEM INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHAMPION BREWERIES and NEM INSURANCE.
Diversification Opportunities for CHAMPION BREWERIES and NEM INSURANCE
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CHAMPION and NEM is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding CHAMPION BREWERIES 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 CHAMPION BREWERIES 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 CHAMPION BREWERIES 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 CHAMPION BREWERIES i.e., CHAMPION BREWERIES and NEM INSURANCE go up and down completely randomly.
Pair Corralation between CHAMPION BREWERIES and NEM INSURANCE
Assuming the 90 days trading horizon CHAMPION BREWERIES PLC is expected to generate 1.32 times more return on investment than NEM INSURANCE. However, CHAMPION BREWERIES is 1.32 times more volatile than NEM INSURANCE PLC. It trades about 0.07 of its potential returns per unit of risk. NEM INSURANCE PLC is currently generating about 0.07 per unit of risk. If you would invest 294.00 in CHAMPION BREWERIES PLC on October 12, 2024 and sell it today you would earn a total of 126.00 from holding CHAMPION BREWERIES PLC or generate 42.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CHAMPION BREWERIES PLC vs. NEM INSURANCE PLC
Performance |
| Timeline |
| CHAMPION BREWERIES PLC |
| NEM INSURANCE PLC |
CHAMPION BREWERIES and NEM INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHAMPION BREWERIES and NEM INSURANCE
The main advantage of trading using opposite CHAMPION BREWERIES and NEM INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHAMPION BREWERIES 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.| CHAMPION BREWERIES vs. C I LEASING | CHAMPION BREWERIES vs. AFRICAN ALLIANCE INSURANCE | CHAMPION BREWERIES vs. STERLING FINANCIAL HOLDINGS | CHAMPION BREWERIES vs. AFROMEDIA PLC |
| NEM INSURANCE vs. CUSTODIAN INVESTMENT PLC | NEM INSURANCE vs. WEMA BANK PLC | NEM INSURANCE vs. CHAMPION BREWERIES PLC | NEM INSURANCE vs. ECOBANK TRANSNATIONAL INCORPORATED |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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