Correlation Between NIGERIAN EXCHANGE and Dow Jones
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By analyzing existing cross correlation between NIGERIAN EXCHANGE GROUP and Dow Jones Industrial, you can compare the effects of market volatilities on NIGERIAN EXCHANGE and Dow Jones 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 NIGERIAN EXCHANGE with a short position of Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of NIGERIAN EXCHANGE and Dow Jones.
Diversification Opportunities for NIGERIAN EXCHANGE and Dow Jones
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NIGERIAN and Dow is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NIGERIAN EXCHANGE GROUP and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial and NIGERIAN EXCHANGE 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 NIGERIAN EXCHANGE GROUP are associated (or correlated) with Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of NIGERIAN EXCHANGE i.e., NIGERIAN EXCHANGE and Dow Jones go up and down completely randomly.
Pair Corralation between NIGERIAN EXCHANGE and Dow Jones
Assuming the 90 days trading horizon NIGERIAN EXCHANGE GROUP is expected to generate 4.28 times more return on investment than Dow Jones. However, NIGERIAN EXCHANGE is 4.28 times more volatile than Dow Jones Industrial. It trades about 0.06 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.2 per unit of risk. If you would invest 2,275 in NIGERIAN EXCHANGE GROUP on September 2, 2024 and sell it today you would earn a total of 235.00 from holding NIGERIAN EXCHANGE GROUP or generate 10.33% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
NIGERIAN EXCHANGE GROUP vs. Dow Jones Industrial
Performance |
Timeline |
NIGERIAN EXCHANGE and Dow Jones Volatility Contrast
Predicted Return Density |
Returns |
NIGERIAN EXCHANGE GROUP
Pair trading matchups for NIGERIAN EXCHANGE
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with NIGERIAN EXCHANGE and Dow Jones
The main advantage of trading using opposite NIGERIAN EXCHANGE and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NIGERIAN EXCHANGE position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.NIGERIAN EXCHANGE vs. UNITED BANK FOR | NIGERIAN EXCHANGE vs. AXAMANSARD INSURANCE PLC | NIGERIAN EXCHANGE vs. NEM INSURANCE PLC | NIGERIAN EXCHANGE vs. MULTI TREX INTEGRATED FOODS |
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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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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