Correlation Between VITAFOAM NIGERIA and SOVEREIGN TRUST
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By analyzing existing cross correlation between VITAFOAM NIGERIA PLC and SOVEREIGN TRUST INSURANCE, you can compare the effects of market volatilities on VITAFOAM NIGERIA and SOVEREIGN TRUST 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 SOVEREIGN TRUST. Check out your portfolio center. Please also check ongoing floating volatility patterns of VITAFOAM NIGERIA and SOVEREIGN TRUST.
Diversification Opportunities for VITAFOAM NIGERIA and SOVEREIGN TRUST
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VITAFOAM and SOVEREIGN is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding VITAFOAM NIGERIA PLC and SOVEREIGN TRUST INSURANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOVEREIGN TRUST INSURANCE 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 SOVEREIGN TRUST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOVEREIGN TRUST INSURANCE has no effect on the direction of VITAFOAM NIGERIA i.e., VITAFOAM NIGERIA and SOVEREIGN TRUST go up and down completely randomly.
Pair Corralation between VITAFOAM NIGERIA and SOVEREIGN TRUST
Assuming the 90 days trading horizon VITAFOAM NIGERIA PLC is expected to generate 0.81 times more return on investment than SOVEREIGN TRUST. However, VITAFOAM NIGERIA PLC is 1.23 times less risky than SOVEREIGN TRUST. It trades about 0.31 of its potential returns per unit of risk. SOVEREIGN TRUST INSURANCE is currently generating about 0.16 per unit of risk. If you would invest 3,765 in VITAFOAM NIGERIA PLC on April 7, 2025 and sell it today you would earn a total of 3,635 from holding VITAFOAM NIGERIA PLC or generate 96.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VITAFOAM NIGERIA PLC vs. SOVEREIGN TRUST INSURANCE
Performance |
| Timeline |
| VITAFOAM NIGERIA PLC |
| SOVEREIGN TRUST INSURANCE |
VITAFOAM NIGERIA and SOVEREIGN TRUST Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VITAFOAM NIGERIA and SOVEREIGN TRUST
The main advantage of trading using opposite VITAFOAM NIGERIA and SOVEREIGN TRUST positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VITAFOAM NIGERIA position performs unexpectedly, SOVEREIGN TRUST 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 SOVEREIGN TRUST will offset losses from the drop in SOVEREIGN TRUST's long position.| VITAFOAM NIGERIA vs. SECURE ELECTRONIC TECHNOLOGY | VITAFOAM NIGERIA vs. ABBEY MORTGAGE BANK | VITAFOAM NIGERIA vs. CORNERSTONE INSURANCE PLC | VITAFOAM NIGERIA vs. DEAP CAPITAL MANAGEMENT |
| SOVEREIGN TRUST vs. CUSTODIAN INVESTMENT PLC | SOVEREIGN TRUST vs. SECURE ELECTRONIC TECHNOLOGY | SOVEREIGN TRUST vs. UNION HOMES REAL | SOVEREIGN TRUST vs. FORTIS GLOBAL INSURANCE |
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