Correlation Between NIGERIAN BREWERIES and CHAMPION BREWERIES
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By analyzing existing cross correlation between NIGERIAN BREWERIES PLC and CHAMPION BREWERIES PLC, you can compare the effects of market volatilities on NIGERIAN BREWERIES 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 NIGERIAN BREWERIES with a short position of CHAMPION BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGERIAN BREWERIES and CHAMPION BREWERIES.
Diversification Opportunities for NIGERIAN BREWERIES and CHAMPION BREWERIES
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between NIGERIAN and CHAMPION is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding NIGERIAN BREWERIES 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 NIGERIAN 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 NIGERIAN BREWERIES 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 NIGERIAN BREWERIES i.e., NIGERIAN BREWERIES and CHAMPION BREWERIES go up and down completely randomly.
Pair Corralation between NIGERIAN BREWERIES and CHAMPION BREWERIES
Assuming the 90 days trading horizon NIGERIAN BREWERIES PLC is expected to under-perform the CHAMPION BREWERIES. But the stock apears to be less risky and, when comparing its historical volatility, NIGERIAN BREWERIES PLC is 1.57 times less risky than CHAMPION BREWERIES. The stock trades about -0.09 of its potential returns per unit of risk. The CHAMPION BREWERIES PLC is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 346.00 in CHAMPION BREWERIES PLC on September 1, 2024 and sell it today you would earn a total of 25.00 from holding CHAMPION BREWERIES PLC or generate 7.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGERIAN BREWERIES PLC vs. CHAMPION BREWERIES PLC
Performance |
| Timeline |
| NIGERIAN BREWERIES PLC |
| CHAMPION BREWERIES PLC |
NIGERIAN BREWERIES and CHAMPION BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGERIAN BREWERIES and CHAMPION BREWERIES
The main advantage of trading using opposite NIGERIAN BREWERIES and CHAMPION BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGERIAN BREWERIES 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.| NIGERIAN BREWERIES vs. AFRICAN ALLIANCE INSURANCE | NIGERIAN BREWERIES vs. CHAMPION BREWERIES PLC | NIGERIAN BREWERIES vs. BUA FOODS PLC | NIGERIAN BREWERIES vs. CORONATION INSURANCE 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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