Correlation Between C I and NORTHERN NIGERIA

Can any of the company-specific risk be diversified away by investing in both C I and NORTHERN NIGERIA 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 C I and NORTHERN NIGERIA into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between C I LEASING and NORTHERN NIGERIA FLOUR, you can compare the effects of market volatilities on C I and NORTHERN NIGERIA 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 C I with a short position of NORTHERN NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of C I and NORTHERN NIGERIA.

Diversification Opportunities for C I and NORTHERN NIGERIA

-0.53

Correlation Coefficient

C I  NORTHERN NIGERIA

Excellent diversification

The 3 months correlation between CILEASING and NORTHERN is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding C I LEASING and NORTHERN NIGERIA FLOUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN NIGERIA FLOUR and C I 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 C I LEASING are associated (or correlated) with NORTHERN NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN NIGERIA FLOUR has no effect on the direction of C I i.e., C I and NORTHERN NIGERIA go up and down completely randomly.

Pair Corralation between C I and NORTHERN NIGERIA

Assuming the 90 days trading horizon C I is expected to generate 17.78 times less return on investment than NORTHERN NIGERIA. But when comparing it to its historical volatility, C I LEASING is 1.08 times less risky than NORTHERN NIGERIA. It trades about 0.02 of its potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  4,390  in NORTHERN NIGERIA FLOUR on December 30, 2024 and sell it today you would earn a total of  4,385  from holding NORTHERN NIGERIA FLOUR or generate 99.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

C I LEASING  vs.  NORTHERN NIGERIA FLOUR

C I LEASING

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in C I LEASING are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, C I is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

NORTHERN NIGERIA FLOUR

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHERN NIGERIA FLOUR are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating technical and fundamental indicators, NORTHERN NIGERIA displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with C I and NORTHERN NIGERIA

The main advantage of trading using opposite C I and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C I position performs unexpectedly, NORTHERN NIGERIA 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 NORTHERN NIGERIA will offset losses from the drop in NORTHERN NIGERIA's long position.

The idea behind C I LEASING and NORTHERN NIGERIA FLOUR pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.