Correlation Between Nigerian Stock and NORTHERN NIGERIA
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By analyzing existing cross correlation between Nigerian Stock Exchange and NORTHERN NIGERIA FLOUR, you can compare the effects of market volatilities on Nigerian Stock and NORTHERN NIGERIA 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 NORTHERN NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nigerian Stock and NORTHERN NIGERIA.
Diversification Opportunities for Nigerian Stock and NORTHERN NIGERIA
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Nigerian and NORTHERN is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Nigerian Stock Exchange and NORTHERN NIGERIA FLOUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN NIGERIA FLOUR 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 NORTHERN NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN NIGERIA FLOUR has no effect on the direction of Nigerian Stock i.e., Nigerian Stock and NORTHERN NIGERIA go up and down completely randomly.
Pair Corralation between Nigerian Stock and NORTHERN NIGERIA
Assuming the 90 days trading horizon Nigerian Stock is expected to generate 3.27 times less return on investment than NORTHERN NIGERIA. But when comparing it to its historical volatility, Nigerian Stock Exchange is 11.32 times less risky than NORTHERN NIGERIA. It trades about 0.38 of its potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 3,750 in NORTHERN NIGERIA FLOUR on September 19, 2024 and sell it today you would earn a total of 255.00 from holding NORTHERN NIGERIA FLOUR or generate 6.8% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nigerian Stock Exchange vs. NORTHERN NIGERIA FLOUR
Performance |
| Timeline |
Nigerian Stock and NORTHERN NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Nigerian Stock Exchange
Pair trading matchups for Nigerian Stock
NORTHERN NIGERIA FLOUR
Pair trading matchups for NORTHERN NIGERIA
Pair Trading with Nigerian Stock and NORTHERN NIGERIA
The main advantage of trading using opposite Nigerian Stock and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nigerian Stock position performs unexpectedly, NORTHERN NIGERIA 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 NORTHERN NIGERIA will offset losses from the drop in NORTHERN NIGERIA'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 |
| NORTHERN NIGERIA vs. GUINEA INSURANCE PLC | NORTHERN NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY | NORTHERN NIGERIA vs. VFD GROUP | NORTHERN NIGERIA vs. IKEJA HOTELS 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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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