Correlation Between Nigerian Stock and NCR PLC
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By analyzing existing cross correlation between Nigerian Stock Exchange and NCR PLC, you can compare the effects of market volatilities on Nigerian Stock and NCR PLC 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 NCR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nigerian Stock and NCR PLC.
Diversification Opportunities for Nigerian Stock and NCR PLC
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Nigerian and NCR is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Nigerian Stock Exchange and NCR PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR 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 NCR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR PLC has no effect on the direction of Nigerian Stock i.e., Nigerian Stock and NCR PLC go up and down completely randomly.
Pair Corralation between Nigerian Stock and NCR PLC
Assuming the 90 days trading horizon Nigerian Stock is expected to generate 4.59 times less return on investment than NCR PLC. But when comparing it to its historical volatility, Nigerian Stock Exchange is 14.14 times less risky than NCR PLC. It trades about 0.38 of its potential returns per unit of risk. NCR PLC is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 432.00 in NCR PLC on September 19, 2024 and sell it today you would earn a total of 41.00 from holding NCR PLC or generate 9.49% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nigerian Stock Exchange vs. NCR PLC
Performance |
| Timeline |
Nigerian Stock and NCR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Nigerian Stock Exchange
Pair trading matchups for Nigerian Stock
NCR PLC
Pair trading matchups for NCR PLC
Pair Trading with Nigerian Stock and NCR PLC
The main advantage of trading using opposite Nigerian Stock and NCR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nigerian Stock position performs unexpectedly, NCR PLC 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 NCR PLC will offset losses from the drop in NCR PLC's long position.| Nigerian Stock vs. UNITED BANK FOR | Nigerian Stock vs. TOTALENERGIES MARKETING NIGERIA | Nigerian Stock vs. WEMA BANK PLC | Nigerian Stock vs. ECOBANK TRANSNATIONAL INCORPORATED |
| NCR PLC vs. FIDSON HEALTHCARE PLC | NCR PLC vs. GOLDEN GUINEA BREWERIES | NCR PLC vs. INTERNATIONAL BREWERIES PLC | NCR PLC vs. GOLDLINK INSURANCE 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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