Correlation Between NORTHERN NIGERIA and TRANS NATIONWIDE
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By analyzing existing cross correlation between NORTHERN NIGERIA FLOUR and TRANS NATIONWIDE EXPRESS PLC, you can compare the effects of market volatilities on NORTHERN NIGERIA and TRANS NATIONWIDE 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 TRANS NATIONWIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of NORTHERN NIGERIA and TRANS NATIONWIDE.
Diversification Opportunities for NORTHERN NIGERIA and TRANS NATIONWIDE
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NORTHERN and TRANS is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding NORTHERN NIGERIA FLOUR and TRANS NATIONWIDE EXPRESS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRANS NATIONWIDE EXP 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 TRANS NATIONWIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRANS NATIONWIDE EXP has no effect on the direction of NORTHERN NIGERIA i.e., NORTHERN NIGERIA and TRANS NATIONWIDE go up and down completely randomly.
Pair Corralation between NORTHERN NIGERIA and TRANS NATIONWIDE
Assuming the 90 days trading horizon NORTHERN NIGERIA FLOUR is expected to generate 3.7 times more return on investment than TRANS NATIONWIDE. However, NORTHERN NIGERIA is 3.7 times more volatile than TRANS NATIONWIDE EXPRESS PLC. It trades about 0.12 of its potential returns per unit of risk. TRANS NATIONWIDE EXPRESS PLC is currently generating about 0.1 per unit of risk. If you would invest 7,900 in NORTHERN NIGERIA FLOUR on April 17, 2025 and sell it today you would earn a total of 2,450 from holding NORTHERN NIGERIA FLOUR or generate 31.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NORTHERN NIGERIA FLOUR vs. TRANS NATIONWIDE EXPRESS PLC
Performance |
| Timeline |
| NORTHERN NIGERIA FLOUR |
| TRANS NATIONWIDE EXP |
NORTHERN NIGERIA and TRANS NATIONWIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NORTHERN NIGERIA and TRANS NATIONWIDE
The main advantage of trading using opposite NORTHERN NIGERIA and TRANS NATIONWIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NORTHERN NIGERIA position performs unexpectedly, TRANS NATIONWIDE 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 TRANS NATIONWIDE will offset losses from the drop in TRANS NATIONWIDE's long position.| NORTHERN NIGERIA vs. CORONATION INSURANCE PLC | NORTHERN NIGERIA vs. ECOBANK TRANSNATIONAL INCORPORATED | NORTHERN NIGERIA vs. UNION HOMES REAL | NORTHERN NIGERIA vs. INTERNATIONAL BREWERIES 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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