Correlation Between UNITED BANK and NESTLE NIGERIA
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By analyzing existing cross correlation between UNITED BANK FOR and NESTLE NIGERIA PLC, you can compare the effects of market volatilities on UNITED BANK and NESTLE 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 UNITED BANK with a short position of NESTLE NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED BANK and NESTLE NIGERIA.
Diversification Opportunities for UNITED BANK and NESTLE NIGERIA
0.87 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between UNITED and NESTLE is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding UNITED BANK FOR and NESTLE NIGERIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NESTLE NIGERIA PLC and UNITED BANK 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 UNITED BANK FOR are associated (or correlated) with NESTLE NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NESTLE NIGERIA PLC has no effect on the direction of UNITED BANK i.e., UNITED BANK and NESTLE NIGERIA go up and down completely randomly.
Pair Corralation between UNITED BANK and NESTLE NIGERIA
If you would invest 3,800 in UNITED BANK FOR on December 8, 2024 and sell it today you would lose (5.00) from holding UNITED BANK FOR or give up 0.13% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED BANK FOR vs. NESTLE NIGERIA PLC
Performance |
| Timeline |
| UNITED BANK FOR |
| NESTLE NIGERIA PLC |
UNITED BANK and NESTLE NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED BANK and NESTLE NIGERIA
The main advantage of trading using opposite UNITED BANK and NESTLE NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED BANK position performs unexpectedly, NESTLE 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 NESTLE NIGERIA will offset losses from the drop in NESTLE NIGERIA's long position.| UNITED BANK vs. NEM 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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