Correlation Between GUINEA INSURANCE and NIGERIAN EXCHANGE
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By analyzing existing cross correlation between GUINEA INSURANCE PLC and NIGERIAN EXCHANGE GROUP, you can compare the effects of market volatilities on GUINEA INSURANCE and NIGERIAN EXCHANGE 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 GUINEA INSURANCE with a short position of NIGERIAN EXCHANGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of GUINEA INSURANCE and NIGERIAN EXCHANGE.
Diversification Opportunities for GUINEA INSURANCE and NIGERIAN EXCHANGE
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GUINEA and NIGERIAN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding GUINEA INSURANCE PLC and NIGERIAN EXCHANGE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGERIAN EXCHANGE and GUINEA 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 GUINEA INSURANCE PLC are associated (or correlated) with NIGERIAN EXCHANGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGERIAN EXCHANGE has no effect on the direction of GUINEA INSURANCE i.e., GUINEA INSURANCE and NIGERIAN EXCHANGE go up and down completely randomly.
Pair Corralation between GUINEA INSURANCE and NIGERIAN EXCHANGE
Assuming the 90 days trading horizon GUINEA INSURANCE PLC is expected to generate 1.66 times more return on investment than NIGERIAN EXCHANGE. However, GUINEA INSURANCE is 1.66 times more volatile than NIGERIAN EXCHANGE GROUP. It trades about 0.07 of its potential returns per unit of risk. NIGERIAN EXCHANGE GROUP is currently generating about 0.04 per unit of risk. If you would invest 30.00 in GUINEA INSURANCE PLC on September 4, 2024 and sell it today you would earn a total of 21.00 from holding GUINEA INSURANCE PLC or generate 70.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.59% |
| Values | Daily Returns |
GUINEA INSURANCE PLC vs. NIGERIAN EXCHANGE GROUP
Performance |
| Timeline |
| GUINEA INSURANCE PLC |
| NIGERIAN EXCHANGE |
GUINEA INSURANCE and NIGERIAN EXCHANGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GUINEA INSURANCE and NIGERIAN EXCHANGE
The main advantage of trading using opposite GUINEA INSURANCE and NIGERIAN EXCHANGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GUINEA INSURANCE position performs unexpectedly, NIGERIAN EXCHANGE 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 EXCHANGE will offset losses from the drop in NIGERIAN EXCHANGE's long position.| GUINEA INSURANCE vs. NEM INSURANCE PLC | GUINEA INSURANCE vs. ABC TRANSPORT PLC | GUINEA INSURANCE vs. AFRICAN ALLIANCE INSURANCE | GUINEA INSURANCE vs. ABBEY MORTGAGE BANK |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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