Correlation Between Visa and NORTHERN NIGERIA
Can any of the company-specific risk be diversified away by investing in both Visa and NORTHERN NIGERIA at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Visa and NORTHERN NIGERIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and NORTHERN NIGERIA FLOUR, you can compare the effects of market volatilities on Visa and NORTHERN 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 Visa with a short position of NORTHERN NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and NORTHERN NIGERIA.
Diversification Opportunities for Visa and NORTHERN NIGERIA
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Visa and NORTHERN is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and NORTHERN NIGERIA FLOUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN NIGERIA FLOUR and Visa 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 Visa Class A are associated (or correlated) with NORTHERN NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN NIGERIA FLOUR has no effect on the direction of Visa i.e., Visa and NORTHERN NIGERIA go up and down completely randomly.
Pair Corralation between Visa and NORTHERN NIGERIA
Taking into account the 90-day investment horizon Visa Class A is expected to generate 0.45 times more return on investment than NORTHERN NIGERIA. However, Visa Class A is 2.21 times less risky than NORTHERN NIGERIA. It trades about 0.11 of its potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about -0.04 per unit of risk. If you would invest 27,414 in Visa Class A on September 19, 2024 and sell it today you would earn a total of 4,737 from holding Visa Class A or generate 17.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Visa Class A vs. NORTHERN NIGERIA FLOUR
Performance |
| Timeline |
| Visa Class A |
| NORTHERN NIGERIA FLOUR |
Visa and NORTHERN NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and NORTHERN NIGERIA
The main advantage of trading using opposite Visa and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa position performs unexpectedly, NORTHERN 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 NORTHERN NIGERIA will offset losses from the drop in NORTHERN NIGERIA's long position.The idea behind Visa Class A and NORTHERN NIGERIA FLOUR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| NORTHERN NIGERIA vs. GUINEA INSURANCE PLC | NORTHERN NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY | NORTHERN NIGERIA vs. VFD GROUP | NORTHERN NIGERIA 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |