Correlation Between Nigerian Stock and ABC TRANSPORT
Specify exactly 2 symbols:
By analyzing existing cross correlation between Nigerian Stock Exchange and ABC TRANSPORT PLC, you can compare the effects of market volatilities on Nigerian Stock and ABC TRANSPORT 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 Stock with a short position of ABC TRANSPORT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nigerian Stock and ABC TRANSPORT.
Diversification Opportunities for Nigerian Stock and ABC TRANSPORT
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Nigerian and ABC is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Nigerian Stock Exchange and ABC TRANSPORT PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ABC TRANSPORT PLC and Nigerian Stock 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 Stock Exchange are associated (or correlated) with ABC TRANSPORT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ABC TRANSPORT PLC has no effect on the direction of Nigerian Stock i.e., Nigerian Stock and ABC TRANSPORT go up and down completely randomly.
Pair Corralation between Nigerian Stock and ABC TRANSPORT
Assuming the 90 days trading horizon Nigerian Stock is expected to generate 36.28 times less return on investment than ABC TRANSPORT. But when comparing it to its historical volatility, Nigerian Stock Exchange is 14.03 times less risky than ABC TRANSPORT. It trades about 0.07 of its potential returns per unit of risk. ABC TRANSPORT PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 78.00 in ABC TRANSPORT PLC on August 28, 2024 and sell it today you would earn a total of 47.00 from holding ABC TRANSPORT PLC or generate 60.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nigerian Stock Exchange vs. ABC TRANSPORT PLC
Performance |
| Timeline |
Nigerian Stock and ABC TRANSPORT Volatility Contrast
Predicted Return Density |
| Returns |
Nigerian Stock Exchange
Pair trading matchups for Nigerian Stock
ABC TRANSPORT PLC
Pair trading matchups for ABC TRANSPORT
Pair Trading with Nigerian Stock and ABC TRANSPORT
The main advantage of trading using opposite Nigerian Stock and ABC TRANSPORT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nigerian Stock position performs unexpectedly, ABC TRANSPORT 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 ABC TRANSPORT will offset losses from the drop in ABC TRANSPORT's long position.| Nigerian Stock vs. NEM INSURANCE PLC | Nigerian Stock vs. ZENITH BANK PLC | Nigerian Stock vs. CUSTODIAN INVESTMENT PLC | Nigerian Stock vs. CORNERSTONE INSURANCE PLC |
| ABC TRANSPORT vs. GUINEA INSURANCE PLC | ABC TRANSPORT vs. MEYER PLC | ABC TRANSPORT vs. VETIVA INDUSTRIAL ETF |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |