Correlation Between BUA FOODS and VITAFOAM NIGERIA
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By analyzing existing cross correlation between BUA FOODS PLC and VITAFOAM NIGERIA PLC, you can compare the effects of market volatilities on BUA FOODS and VITAFOAM 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 BUA FOODS with a short position of VITAFOAM NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of BUA FOODS and VITAFOAM NIGERIA.
Diversification Opportunities for BUA FOODS and VITAFOAM NIGERIA
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BUA and VITAFOAM is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding BUA FOODS PLC and VITAFOAM NIGERIA PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITAFOAM NIGERIA PLC and BUA FOODS 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 BUA FOODS PLC are associated (or correlated) with VITAFOAM NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITAFOAM NIGERIA PLC has no effect on the direction of BUA FOODS i.e., BUA FOODS and VITAFOAM NIGERIA go up and down completely randomly.
Pair Corralation between BUA FOODS and VITAFOAM NIGERIA
Assuming the 90 days trading horizon BUA FOODS is expected to generate 1.32 times less return on investment than VITAFOAM NIGERIA. But when comparing it to its historical volatility, BUA FOODS PLC is 1.51 times less risky than VITAFOAM NIGERIA. It trades about 0.24 of its potential returns per unit of risk. VITAFOAM NIGERIA PLC is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest 5,635 in VITAFOAM NIGERIA PLC on June 3, 2025 and sell it today you would earn a total of 2,555 from holding VITAFOAM NIGERIA PLC or generate 45.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BUA FOODS PLC vs. VITAFOAM NIGERIA PLC
Performance |
| Timeline |
| BUA FOODS PLC |
| VITAFOAM NIGERIA PLC |
BUA FOODS and VITAFOAM NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BUA FOODS and VITAFOAM NIGERIA
The main advantage of trading using opposite BUA FOODS and VITAFOAM NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BUA FOODS position performs unexpectedly, VITAFOAM 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 VITAFOAM NIGERIA will offset losses from the drop in VITAFOAM NIGERIA's long position.| BUA FOODS vs. LIVINGTRUST MORTGAGE BANK | BUA FOODS vs. ZENITH BANK PLC | BUA FOODS vs. UNION HOMES REAL | BUA FOODS vs. INDUSTRIAL MEDICAL GASES |
| VITAFOAM NIGERIA vs. STACO INSURANCE PLC | VITAFOAM NIGERIA vs. JAIZ BANK PLC | VITAFOAM NIGERIA vs. BUA FOODS PLC | VITAFOAM NIGERIA vs. FIDELITY BANK 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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