Correlation Between GREENWICH ASSET and NORTHERN NIGERIA

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

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

Diversification Opportunities for GREENWICH ASSET and NORTHERN NIGERIA

-0.49

Correlation Coefficient

GREENWICH ASSET  NORTHERN NIGERIA

Very good diversification

The 3 months correlation between GREENWICH and NORTHERN is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding GREENWICH ASSET ETF 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 GREENWICH ASSET 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 GREENWICH ASSET ETF 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 GREENWICH ASSET i.e., GREENWICH ASSET and NORTHERN NIGERIA go up and down completely randomly.

Pair Corralation between GREENWICH ASSET and NORTHERN NIGERIA

Assuming the 90 days trading horizon GREENWICH ASSET ETF is expected to under-perform the NORTHERN NIGERIA. In addition to that, GREENWICH ASSET is 1.3 times more volatile than NORTHERN NIGERIA FLOUR. It trades about -0.12 of its total potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about 0.44 per unit of volatility. If you would invest  3,375  in NORTHERN NIGERIA FLOUR on September 28, 2024 and sell it today you would earn a total of  1,015  from holding NORTHERN NIGERIA FLOUR or generate 30.07% return on investment over 90 days.

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

GREENWICH ASSET ETF  vs.  NORTHERN NIGERIA FLOUR

GREENWICH ASSET ETF

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GREENWICH ASSET ETF has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

NORTHERN NIGERIA FLOUR

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in NORTHERN NIGERIA FLOUR are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very weak 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 GREENWICH ASSET and NORTHERN NIGERIA

The main advantage of trading using opposite GREENWICH ASSET and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GREENWICH ASSET 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 GREENWICH ASSET ETF 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.