Correlation Between SECURE ELECTRONIC and NIGERIAN BREWERIES
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By analyzing existing cross correlation between SECURE ELECTRONIC TECHNOLOGY and NIGERIAN BREWERIES PLC, you can compare the effects of market volatilities on SECURE ELECTRONIC and NIGERIAN BREWERIES 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 SECURE ELECTRONIC with a short position of NIGERIAN BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURE ELECTRONIC and NIGERIAN BREWERIES.
Diversification Opportunities for SECURE ELECTRONIC and NIGERIAN BREWERIES
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SECURE and NIGERIAN is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding SECURE ELECTRONIC TECHNOLOGY and NIGERIAN BREWERIES PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NIGERIAN BREWERIES PLC and SECURE ELECTRONIC 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 SECURE ELECTRONIC TECHNOLOGY are associated (or correlated) with NIGERIAN BREWERIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NIGERIAN BREWERIES PLC has no effect on the direction of SECURE ELECTRONIC i.e., SECURE ELECTRONIC and NIGERIAN BREWERIES go up and down completely randomly.
Pair Corralation between SECURE ELECTRONIC and NIGERIAN BREWERIES
Assuming the 90 days trading horizon SECURE ELECTRONIC TECHNOLOGY is expected to generate 1.86 times more return on investment than NIGERIAN BREWERIES. However, SECURE ELECTRONIC is 1.86 times more volatile than NIGERIAN BREWERIES PLC. It trades about 0.08 of its potential returns per unit of risk. NIGERIAN BREWERIES PLC is currently generating about -0.01 per unit of risk. If you would invest 24.00 in SECURE ELECTRONIC TECHNOLOGY on October 25, 2024 and sell it today you would earn a total of 56.00 from holding SECURE ELECTRONIC TECHNOLOGY or generate 233.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 89.71% |
| Values | Daily Returns |
SECURE ELECTRONIC TECHNOLOGY vs. NIGERIAN BREWERIES PLC
Performance |
| Timeline |
| SECURE ELECTRONIC |
| NIGERIAN BREWERIES PLC |
SECURE ELECTRONIC and NIGERIAN BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECURE ELECTRONIC and NIGERIAN BREWERIES
The main advantage of trading using opposite SECURE ELECTRONIC and NIGERIAN BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURE ELECTRONIC position performs unexpectedly, NIGERIAN BREWERIES 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 NIGERIAN BREWERIES will offset losses from the drop in NIGERIAN BREWERIES's long position.| SECURE ELECTRONIC vs. GUINEA INSURANCE PLC | SECURE ELECTRONIC vs. VETIVA BANKING ETF | SECURE ELECTRONIC vs. BUA FOODS PLC | SECURE ELECTRONIC vs. INTERNATIONAL BREWERIES PLC |
| NIGERIAN BREWERIES vs. GUINEA INSURANCE PLC | NIGERIAN BREWERIES vs. SECURE ELECTRONIC TECHNOLOGY | NIGERIAN BREWERIES vs. VETIVA BANKING ETF | NIGERIAN BREWERIES vs. BUA FOODS PLC |
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