Correlation Between NORTHERN NIGERIA and IKEJA HOTELS
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By analyzing existing cross correlation between NORTHERN NIGERIA FLOUR and IKEJA HOTELS PLC, you can compare the effects of market volatilities on NORTHERN NIGERIA and IKEJA HOTELS 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 NORTHERN NIGERIA with a short position of IKEJA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHERN NIGERIA and IKEJA HOTELS.
Diversification Opportunities for NORTHERN NIGERIA and IKEJA HOTELS
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORTHERN and IKEJA is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding NORTHERN NIGERIA FLOUR and IKEJA HOTELS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IKEJA HOTELS PLC and NORTHERN NIGERIA 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 NORTHERN NIGERIA FLOUR are associated (or correlated) with IKEJA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IKEJA HOTELS PLC has no effect on the direction of NORTHERN NIGERIA i.e., NORTHERN NIGERIA and IKEJA HOTELS go up and down completely randomly.
Pair Corralation between NORTHERN NIGERIA and IKEJA HOTELS
Assuming the 90 days trading horizon NORTHERN NIGERIA FLOUR is expected to under-perform the IKEJA HOTELS. In addition to that, NORTHERN NIGERIA is 1.38 times more volatile than IKEJA HOTELS PLC. It trades about -0.02 of its total potential returns per unit of risk. IKEJA HOTELS PLC is currently generating about 0.09 per unit of volatility. If you would invest 700.00 in IKEJA HOTELS PLC on September 13, 2024 and sell it today you would earn a total of 100.00 from holding IKEJA HOTELS PLC or generate 14.29% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
NORTHERN NIGERIA FLOUR vs. IKEJA HOTELS PLC
Performance |
Timeline |
NORTHERN NIGERIA FLOUR |
IKEJA HOTELS PLC |
NORTHERN NIGERIA and IKEJA HOTELS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with NORTHERN NIGERIA and IKEJA HOTELS
The main advantage of trading using opposite NORTHERN NIGERIA and IKEJA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHERN NIGERIA position performs unexpectedly, IKEJA HOTELS 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 IKEJA HOTELS will offset losses from the drop in IKEJA HOTELS's long position.NORTHERN NIGERIA vs. GUINEA INSURANCE PLC | NORTHERN NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY | NORTHERN NIGERIA vs. VFD GROUP | NORTHERN NIGERIA vs. IKEJA HOTELS 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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