Correlation Between MAY BAKER and AIICO INSURANCE
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By analyzing existing cross correlation between MAY BAKER NIGERIA and AIICO INSURANCE PLC, you can compare the effects of market volatilities on MAY BAKER and AIICO 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 MAY BAKER with a short position of AIICO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of MAY BAKER and AIICO INSURANCE.
Diversification Opportunities for MAY BAKER and AIICO INSURANCE
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MAY and AIICO is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding MAY BAKER NIGERIA and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and MAY BAKER 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 MAY BAKER NIGERIA are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of MAY BAKER i.e., MAY BAKER and AIICO INSURANCE go up and down completely randomly.
Pair Corralation between MAY BAKER and AIICO INSURANCE
Assuming the 90 days trading horizon MAY BAKER is expected to generate 1.26 times less return on investment than AIICO INSURANCE. In addition to that, MAY BAKER is 1.03 times more volatile than AIICO INSURANCE PLC. It trades about 0.06 of its total potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.08 per unit of volatility. If you would invest 60.00 in AIICO INSURANCE PLC on December 12, 2024 and sell it today you would earn a total of 105.00 from holding AIICO INSURANCE PLC or generate 175.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MAY BAKER NIGERIA vs. AIICO INSURANCE PLC
Performance |
| Timeline |
| MAY BAKER NIGERIA |
| AIICO INSURANCE PLC |
MAY BAKER and AIICO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MAY BAKER and AIICO INSURANCE
The main advantage of trading using opposite MAY BAKER and AIICO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MAY BAKER position performs unexpectedly, AIICO 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 AIICO INSURANCE will offset losses from the drop in AIICO INSURANCE's long position.| MAY BAKER vs. UNITED BANK FOR | ||
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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