Correlation Between VITAFOAM NIGERIA and AIICO INSURANCE
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By analyzing existing cross correlation between VITAFOAM NIGERIA PLC and AIICO INSURANCE PLC, you can compare the effects of market volatilities on VITAFOAM NIGERIA and AIICO INSURANCE 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 VITAFOAM NIGERIA with a short position of AIICO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITAFOAM NIGERIA and AIICO INSURANCE.
Diversification Opportunities for VITAFOAM NIGERIA and AIICO INSURANCE
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VITAFOAM and AIICO is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding VITAFOAM NIGERIA PLC and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and VITAFOAM 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 VITAFOAM NIGERIA PLC are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of VITAFOAM NIGERIA i.e., VITAFOAM NIGERIA and AIICO INSURANCE go up and down completely randomly.
Pair Corralation between VITAFOAM NIGERIA and AIICO INSURANCE
Assuming the 90 days trading horizon VITAFOAM NIGERIA PLC is expected to generate 1.19 times more return on investment than AIICO INSURANCE. However, VITAFOAM NIGERIA is 1.19 times more volatile than AIICO INSURANCE PLC. It trades about 0.29 of its potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.18 per unit of risk. If you would invest 4,790 in VITAFOAM NIGERIA PLC on April 27, 2025 and sell it today you would earn a total of 3,995 from holding VITAFOAM NIGERIA PLC or generate 83.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VITAFOAM NIGERIA PLC vs. AIICO INSURANCE PLC
Performance |
| Timeline |
| VITAFOAM NIGERIA PLC |
| AIICO INSURANCE PLC |
VITAFOAM NIGERIA and AIICO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITAFOAM NIGERIA and AIICO INSURANCE
The main advantage of trading using opposite VITAFOAM NIGERIA and AIICO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITAFOAM NIGERIA position performs unexpectedly, AIICO INSURANCE 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 AIICO INSURANCE will offset losses from the drop in AIICO INSURANCE's long position.| VITAFOAM NIGERIA vs. LIVINGTRUST MORTGAGE BANK | VITAFOAM NIGERIA vs. STERLING FINANCIAL HOLDINGS | VITAFOAM NIGERIA vs. FORTIS GLOBAL INSURANCE | VITAFOAM NIGERIA vs. AIICO INSURANCE 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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