Correlation Between UNIVERSAL INSURANCE and NIGERIAN BREWERIES
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By analyzing existing cross correlation between UNIVERSAL INSURANCE PANY and NIGERIAN BREWERIES PLC, you can compare the effects of market volatilities on UNIVERSAL INSURANCE 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 UNIVERSAL INSURANCE with a short position of NIGERIAN BREWERIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNIVERSAL INSURANCE and NIGERIAN BREWERIES.
Diversification Opportunities for UNIVERSAL INSURANCE and NIGERIAN BREWERIES
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UNIVERSAL and NIGERIAN is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding UNIVERSAL INSURANCE PANY 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 UNIVERSAL INSURANCE 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 UNIVERSAL INSURANCE PANY 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 UNIVERSAL INSURANCE i.e., UNIVERSAL INSURANCE and NIGERIAN BREWERIES go up and down completely randomly.
Pair Corralation between UNIVERSAL INSURANCE and NIGERIAN BREWERIES
Assuming the 90 days trading horizon UNIVERSAL INSURANCE PANY is expected to generate 2.34 times more return on investment than NIGERIAN BREWERIES. However, UNIVERSAL INSURANCE is 2.34 times more volatile than NIGERIAN BREWERIES PLC. It trades about 0.09 of its potential returns per unit of risk. NIGERIAN BREWERIES PLC is currently generating about 0.02 per unit of risk. If you would invest 32.00 in UNIVERSAL INSURANCE PANY on September 12, 2024 and sell it today you would earn a total of 2.00 from holding UNIVERSAL INSURANCE PANY or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNIVERSAL INSURANCE PANY vs. NIGERIAN BREWERIES PLC
Performance |
| Timeline |
| UNIVERSAL INSURANCE PANY |
| NIGERIAN BREWERIES PLC |
UNIVERSAL INSURANCE and NIGERIAN BREWERIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNIVERSAL INSURANCE and NIGERIAN BREWERIES
The main advantage of trading using opposite UNIVERSAL INSURANCE and NIGERIAN BREWERIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNIVERSAL INSURANCE 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.| UNIVERSAL INSURANCE vs. GUINEA INSURANCE PLC | UNIVERSAL INSURANCE vs. SECURE ELECTRONIC TECHNOLOGY | UNIVERSAL INSURANCE vs. VFD GROUP | UNIVERSAL INSURANCE vs. IKEJA HOTELS PLC |
| NIGERIAN BREWERIES vs. GUINEA INSURANCE PLC | NIGERIAN BREWERIES vs. SECURE ELECTRONIC TECHNOLOGY | NIGERIAN BREWERIES vs. VFD GROUP | NIGERIAN BREWERIES vs. IKEJA HOTELS PLC |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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