Correlation Between NIGERIAN EXCHANGE and CORONATION INSURANCE
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By analyzing existing cross correlation between NIGERIAN EXCHANGE GROUP and CORONATION INSURANCE PLC, you can compare the effects of market volatilities on NIGERIAN EXCHANGE and CORONATION INSURANCE 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 EXCHANGE with a short position of CORONATION INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGERIAN EXCHANGE and CORONATION INSURANCE.
Diversification Opportunities for NIGERIAN EXCHANGE and CORONATION INSURANCE
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between NIGERIAN and CORONATION is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding NIGERIAN EXCHANGE GROUP and CORONATION INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONATION INSURANCE PLC and NIGERIAN EXCHANGE 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 EXCHANGE GROUP are associated (or correlated) with CORONATION INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONATION INSURANCE PLC has no effect on the direction of NIGERIAN EXCHANGE i.e., NIGERIAN EXCHANGE and CORONATION INSURANCE go up and down completely randomly.
Pair Corralation between NIGERIAN EXCHANGE and CORONATION INSURANCE
Assuming the 90 days trading horizon NIGERIAN EXCHANGE is expected to generate 20.1 times less return on investment than CORONATION INSURANCE. But when comparing it to its historical volatility, NIGERIAN EXCHANGE GROUP is 1.44 times less risky than CORONATION INSURANCE. It trades about 0.01 of its potential returns per unit of risk. CORONATION INSURANCE PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 43.00 in CORONATION INSURANCE PLC on August 31, 2024 and sell it today you would earn a total of 60.00 from holding CORONATION INSURANCE PLC or generate 139.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
NIGERIAN EXCHANGE GROUP vs. CORONATION INSURANCE PLC
Performance |
| Timeline |
| NIGERIAN EXCHANGE |
| CORONATION INSURANCE PLC |
NIGERIAN EXCHANGE and CORONATION INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NIGERIAN EXCHANGE and CORONATION INSURANCE
The main advantage of trading using opposite NIGERIAN EXCHANGE and CORONATION INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGERIAN EXCHANGE position performs unexpectedly, CORONATION INSURANCE 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 CORONATION INSURANCE will offset losses from the drop in CORONATION INSURANCE's long position.| NIGERIAN EXCHANGE vs. CORONATION INSURANCE PLC | NIGERIAN EXCHANGE vs. SOVEREIGN TRUST INSURANCE | NIGERIAN EXCHANGE vs. AXAMANSARD INSURANCE PLC | NIGERIAN EXCHANGE vs. AIICO 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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