Correlation Between IKEJA HOTELS and ABBEY MORTGAGE
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By analyzing existing cross correlation between IKEJA HOTELS PLC and ABBEY MORTGAGE BANK, you can compare the effects of market volatilities on IKEJA HOTELS and ABBEY MORTGAGE 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 IKEJA HOTELS with a short position of ABBEY MORTGAGE. Check out your portfolio center. Please also check ongoing floating volatility patterns of IKEJA HOTELS and ABBEY MORTGAGE.
Diversification Opportunities for IKEJA HOTELS and ABBEY MORTGAGE
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between IKEJA and ABBEY is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding IKEJA HOTELS PLC and ABBEY MORTGAGE BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABBEY MORTGAGE BANK and IKEJA HOTELS 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 IKEJA HOTELS PLC are associated (or correlated) with ABBEY MORTGAGE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABBEY MORTGAGE BANK has no effect on the direction of IKEJA HOTELS i.e., IKEJA HOTELS and ABBEY MORTGAGE go up and down completely randomly.
Pair Corralation between IKEJA HOTELS and ABBEY MORTGAGE
Assuming the 90 days trading horizon IKEJA HOTELS PLC is expected to generate 1.46 times more return on investment than ABBEY MORTGAGE. However, IKEJA HOTELS is 1.46 times more volatile than ABBEY MORTGAGE BANK. It trades about 0.22 of its potential returns per unit of risk. ABBEY MORTGAGE BANK is currently generating about 0.3 per unit of risk. If you would invest 750.00 in IKEJA HOTELS PLC on September 19, 2024 and sell it today you would earn a total of 130.00 from holding IKEJA HOTELS PLC or generate 17.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
IKEJA HOTELS PLC vs. ABBEY MORTGAGE BANK
Performance |
| Timeline |
| IKEJA HOTELS PLC |
| ABBEY MORTGAGE BANK |
IKEJA HOTELS and ABBEY MORTGAGE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IKEJA HOTELS and ABBEY MORTGAGE
The main advantage of trading using opposite IKEJA HOTELS and ABBEY MORTGAGE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IKEJA HOTELS position performs unexpectedly, ABBEY MORTGAGE 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 ABBEY MORTGAGE will offset losses from the drop in ABBEY MORTGAGE's long position.| IKEJA HOTELS vs. GUINEA INSURANCE PLC | IKEJA HOTELS vs. SECURE ELECTRONIC TECHNOLOGY | IKEJA HOTELS vs. VFD GROUP | IKEJA HOTELS vs. VETIVA S P |
| ABBEY MORTGAGE vs. GUINEA INSURANCE PLC | ABBEY MORTGAGE vs. SECURE ELECTRONIC TECHNOLOGY | ABBEY MORTGAGE vs. VFD GROUP | ABBEY MORTGAGE vs. IKEJA HOTELS 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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