Correlation Between STERLING FINANCIAL and NPF MICRO
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and NPF MICRO FINANCE, you can compare the effects of market volatilities on STERLING FINANCIAL and NPF MICRO 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 STERLING FINANCIAL with a short position of NPF MICRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and NPF MICRO.
Diversification Opportunities for STERLING FINANCIAL and NPF MICRO
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STERLING and NPF is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS and NPF MICRO FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NPF MICRO FINANCE and STERLING FINANCIAL 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 STERLING FINANCIAL HOLDINGS are associated (or correlated) with NPF MICRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NPF MICRO FINANCE has no effect on the direction of STERLING FINANCIAL i.e., STERLING FINANCIAL and NPF MICRO go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and NPF MICRO
Assuming the 90 days trading horizon STERLING FINANCIAL HOLDINGS is expected to generate 1.3 times more return on investment than NPF MICRO. However, STERLING FINANCIAL is 1.3 times more volatile than NPF MICRO FINANCE. It trades about 0.04 of its potential returns per unit of risk. NPF MICRO FINANCE is currently generating about -0.01 per unit of risk. If you would invest 360.00 in STERLING FINANCIAL HOLDINGS on September 12, 2024 and sell it today you would earn a total of 129.00 from holding STERLING FINANCIAL HOLDINGS or generate 35.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. NPF MICRO FINANCE
Performance |
| Timeline |
| STERLING FINANCIAL |
| NPF MICRO FINANCE |
STERLING FINANCIAL and NPF MICRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERLING FINANCIAL and NPF MICRO
The main advantage of trading using opposite STERLING FINANCIAL and NPF MICRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL position performs unexpectedly, NPF MICRO 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 NPF MICRO will offset losses from the drop in NPF MICRO's long position.| STERLING FINANCIAL vs. GUINEA INSURANCE PLC | STERLING FINANCIAL vs. SECURE ELECTRONIC TECHNOLOGY | STERLING FINANCIAL vs. VFD GROUP | STERLING FINANCIAL vs. IKEJA HOTELS PLC |
| NPF MICRO vs. CORONATION INSURANCE PLC | NPF MICRO vs. MULTIVERSE MINING AND | NPF MICRO vs. MULTI TREX INTEGRATED FOODS | NPF MICRO vs. CONSOLIDATED HALLMARK INSURANCE |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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