Correlation Between IKEJA HOTELS and CHAMPION BREWERIES
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By analyzing existing cross correlation between IKEJA HOTELS PLC and CHAMPION BREWERIES PLC, you can compare the effects of market volatilities on IKEJA HOTELS and CHAMPION 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 IKEJA HOTELS with a short position of CHAMPION BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of IKEJA HOTELS and CHAMPION BREWERIES.
Diversification Opportunities for IKEJA HOTELS and CHAMPION BREWERIES
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between IKEJA and CHAMPION is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding IKEJA HOTELS PLC and CHAMPION BREWERIES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHAMPION BREWERIES PLC 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 CHAMPION BREWERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHAMPION BREWERIES PLC has no effect on the direction of IKEJA HOTELS i.e., IKEJA HOTELS and CHAMPION BREWERIES go up and down completely randomly.
Pair Corralation between IKEJA HOTELS and CHAMPION BREWERIES
Assuming the 90 days trading horizon IKEJA HOTELS PLC is expected to generate 1.11 times more return on investment than CHAMPION BREWERIES. However, IKEJA HOTELS is 1.11 times more volatile than CHAMPION BREWERIES PLC. It trades about 0.11 of its potential returns per unit of risk. CHAMPION BREWERIES PLC is currently generating about 0.03 per unit of risk. If you would invest 96.00 in IKEJA HOTELS PLC on September 3, 2024 and sell it today you would earn a total of 649.00 from holding IKEJA HOTELS PLC or generate 676.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.38% |
| Values | Daily Returns |
IKEJA HOTELS PLC vs. CHAMPION BREWERIES PLC
Performance |
| Timeline |
| IKEJA HOTELS PLC |
| CHAMPION BREWERIES PLC |
IKEJA HOTELS and CHAMPION BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with IKEJA HOTELS and CHAMPION BREWERIES
The main advantage of trading using opposite IKEJA HOTELS and CHAMPION BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if IKEJA HOTELS position performs unexpectedly, CHAMPION 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 CHAMPION BREWERIES will offset losses from the drop in CHAMPION BREWERIES's long position.| IKEJA HOTELS vs. STANDARD ALLIANCE INSURANCE | IKEJA HOTELS vs. INTERNATIONAL BREWERIES PLC | IKEJA HOTELS vs. ASO SAVINGS AND | IKEJA HOTELS vs. CHAMPION BREWERIES 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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