Correlation Between VITAFOAM NIGERIA and BUA FOODS
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By analyzing existing cross correlation between VITAFOAM NIGERIA PLC and BUA FOODS PLC, you can compare the effects of market volatilities on VITAFOAM NIGERIA and BUA FOODS 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 BUA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITAFOAM NIGERIA and BUA FOODS.
Diversification Opportunities for VITAFOAM NIGERIA and BUA FOODS
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between VITAFOAM and BUA is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding VITAFOAM NIGERIA PLC and BUA FOODS PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BUA FOODS 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 BUA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BUA FOODS PLC has no effect on the direction of VITAFOAM NIGERIA i.e., VITAFOAM NIGERIA and BUA FOODS go up and down completely randomly.
Pair Corralation between VITAFOAM NIGERIA and BUA FOODS
Assuming the 90 days trading horizon VITAFOAM NIGERIA PLC is expected to generate 2.9 times more return on investment than BUA FOODS. However, VITAFOAM NIGERIA is 2.9 times more volatile than BUA FOODS PLC. It trades about 0.35 of its potential returns per unit of risk. BUA FOODS PLC is currently generating about 0.12 per unit of risk. If you would invest 3,700 in VITAFOAM NIGERIA PLC on April 17, 2025 and sell it today you would earn a total of 4,300 from holding VITAFOAM NIGERIA PLC or generate 116.22% 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. BUA FOODS PLC
Performance |
| Timeline |
| VITAFOAM NIGERIA PLC |
| BUA FOODS PLC |
VITAFOAM NIGERIA and BUA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITAFOAM NIGERIA and BUA FOODS
The main advantage of trading using opposite VITAFOAM NIGERIA and BUA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITAFOAM NIGERIA position performs unexpectedly, BUA FOODS 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 BUA FOODS will offset losses from the drop in BUA FOODS's long position.| VITAFOAM NIGERIA vs. FORTIS GLOBAL INSURANCE | VITAFOAM NIGERIA vs. CORNERSTONE INSURANCE PLC | VITAFOAM NIGERIA vs. AXAMANSARD INSURANCE PLC | VITAFOAM NIGERIA vs. UNION HOMES REAL |
| BUA FOODS vs. FIDELITY BANK PLC | BUA FOODS vs. TOTALENERGIES MARKETING NIGERIA | BUA FOODS vs. FORTIS GLOBAL INSURANCE | BUA FOODS vs. CUSTODIAN INVESTMENT 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 Transaction History module to view history of all your transactions and understand their impact on performance.
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