Correlation Between NORTHERN NIGERIA and INDUSTRIAL MEDICAL
Can any of the company-specific risk be diversified away by investing in both NORTHERN NIGERIA and INDUSTRIAL MEDICAL 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 NORTHERN NIGERIA and INDUSTRIAL MEDICAL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NORTHERN NIGERIA FLOUR and INDUSTRIAL MEDICAL GASES, you can compare the effects of market volatilities on NORTHERN NIGERIA and INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHERN NIGERIA and INDUSTRIAL MEDICAL.
Diversification Opportunities for NORTHERN NIGERIA and INDUSTRIAL MEDICAL
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between NORTHERN and INDUSTRIAL is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding NORTHERN NIGERIA FLOUR and INDUSTRIAL MEDICAL GASES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INDUSTRIAL MEDICAL GASES 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 INDUSTRIAL MEDICAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INDUSTRIAL MEDICAL GASES has no effect on the direction of NORTHERN NIGERIA i.e., NORTHERN NIGERIA and INDUSTRIAL MEDICAL go up and down completely randomly.
Pair Corralation between NORTHERN NIGERIA and INDUSTRIAL MEDICAL
Assuming the 90 days trading horizon NORTHERN NIGERIA FLOUR is expected to generate 1.1 times more return on investment than INDUSTRIAL MEDICAL. However, NORTHERN NIGERIA is 1.1 times more volatile than INDUSTRIAL MEDICAL GASES. It trades about 0.14 of its potential returns per unit of risk. INDUSTRIAL MEDICAL GASES is currently generating about 0.1 per unit of risk. If you would invest 7,500 in NORTHERN NIGERIA FLOUR on April 30, 2025 and sell it today you would earn a total of 2,850 from holding NORTHERN NIGERIA FLOUR or generate 38.0% 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. INDUSTRIAL MEDICAL GASES
Performance |
| Timeline |
| NORTHERN NIGERIA FLOUR |
| INDUSTRIAL MEDICAL GASES |
NORTHERN NIGERIA and INDUSTRIAL MEDICAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHERN NIGERIA and INDUSTRIAL MEDICAL
The main advantage of trading using opposite NORTHERN NIGERIA and INDUSTRIAL MEDICAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHERN NIGERIA position performs unexpectedly, INDUSTRIAL MEDICAL 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 INDUSTRIAL MEDICAL will offset losses from the drop in INDUSTRIAL MEDICAL's long position.| NORTHERN NIGERIA vs. UNITY BANK PLC | NORTHERN NIGERIA vs. GOLDEN GUINEA BREWERIES | NORTHERN NIGERIA vs. NIGERIAN BREWERIES PLC | NORTHERN NIGERIA vs. INTERNATIONAL ENERGY INSURANCE |
| INDUSTRIAL MEDICAL vs. AXAMANSARD INSURANCE PLC | INDUSTRIAL MEDICAL vs. CORNERSTONE INSURANCE PLC | INDUSTRIAL MEDICAL vs. TRANSCORP HOTELS PLC | INDUSTRIAL MEDICAL vs. ECOBANK TRANSNATIONAL INCORPORATED |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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