Correlation Between Nigerian Stock and VETIVA BANKING
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By analyzing existing cross correlation between Nigerian Stock Exchange and VETIVA BANKING ETF, you can compare the effects of market volatilities on Nigerian Stock and VETIVA BANKING 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 VETIVA BANKING. Check out your portfolio center. Please also check ongoing floating volatility patterns of Nigerian Stock and VETIVA BANKING.
Diversification Opportunities for Nigerian Stock and VETIVA BANKING
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Nigerian and VETIVA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Nigerian Stock Exchange and VETIVA BANKING ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VETIVA BANKING ETF 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 VETIVA BANKING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VETIVA BANKING ETF has no effect on the direction of Nigerian Stock i.e., Nigerian Stock and VETIVA BANKING go up and down completely randomly.
Pair Corralation between Nigerian Stock and VETIVA BANKING
Assuming the 90 days trading horizon Nigerian Stock is expected to generate 1.39 times less return on investment than VETIVA BANKING. But when comparing it to its historical volatility, Nigerian Stock Exchange is 3.0 times less risky than VETIVA BANKING. It trades about 0.18 of its potential returns per unit of risk. VETIVA BANKING ETF is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 521.00 in VETIVA BANKING ETF on August 31, 2024 and sell it today you would earn a total of 499.00 from holding VETIVA BANKING ETF or generate 95.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Nigerian Stock Exchange vs. VETIVA BANKING ETF
Performance |
| Timeline |
Nigerian Stock and VETIVA BANKING Volatility Contrast
Predicted Return Density |
| Returns |
Nigerian Stock Exchange
Pair trading matchups for Nigerian Stock
VETIVA BANKING ETF
Pair trading matchups for VETIVA BANKING
Pair Trading with Nigerian Stock and VETIVA BANKING
The main advantage of trading using opposite Nigerian Stock and VETIVA BANKING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Nigerian Stock position performs unexpectedly, VETIVA BANKING 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 VETIVA BANKING will offset losses from the drop in VETIVA BANKING's long position.| Nigerian Stock vs. INTERNATIONAL ENERGY INSURANCE | Nigerian Stock vs. INDUSTRIAL MEDICAL GASES | Nigerian Stock vs. CORNERSTONE INSURANCE PLC | Nigerian Stock vs. VETIVA INDUSTRIAL ETF |
| VETIVA BANKING vs. SECURE ELECTRONIC TECHNOLOGY | VETIVA BANKING vs. VFD GROUP | VETIVA BANKING vs. AFROMEDIA PLC | VETIVA BANKING vs. DEAP CAPITAL MANAGEMENT |
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 Stocks Directory module to find actively traded stocks across global markets.
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