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README.md

01. Equities Performance Analysis

Comparative performance analysis of three major Nigerian stocks, namely, DANGCEM (Dangote Cement Plc), GTCO (Guaranty Trust Holding Company Plc), and ZENITHBANK (Zenith Bank Plc), over a 5-year period (approximately June 2021 to June 2026).

Objective

To evaluate and compare the risk-return profiles of these equities using various financial metrics, assess their diversification potential through similarity measures, and determine which stock offered the best risk-adjusted performance.

Dataset

  • Source: Investing.com (daily closing prices)
  • Time Period: June 2021 – June 2026
  • Stocks: DANGCEM (Dangote Cement Plc - Industrial Goods sector), GTCO (Guaranty Trust Holding Company Plc) and ZENITHBANK (Zenith Bank Plc - Financial Services sector)

Key Analyses Performed

  • Data loading, cleaning and preprocessing
  • Calculation of daily returns and annualized geometric returns
  • Risk metrics including standard deviation, moving average volatility, semi-variance, and high-low range
  • Risk-adjusted performance using Sharpe Ratio
  • Distribution analysis (skewness and normality testing)
  • Pairwise similarity measures (Euclidean Distance, Manhattan Distance, and Cosine Similarity)
  • Visualizations including normalized price trends, correlation heatmap, return distributions with pairplots and regression lines, and rolling volatility charts

Summary Statistics

Stock Annualized Return Daily Return Std Deviation Sharpe Ratio SemiVariance
DANGCEM 0.0850 0.001248 0.02106 0.0593 0.000236
GTCO 0.0844 0.001135 0.02203 0.0515 0.000414
ZENITHBANK 0.0848 0.001243 0.02277 0.0546 0.000474

Download Summary Statistics

Explanation:

  • Annualized Return shows the compounded yearly return.
  • Sharpe Ratio measures return per unit of risk (higher is better).
  • Std Deviation measures volatility (lower is better for same return).

Pairwise Similarity Measures

Pair Euclidean Distance Manhattan Distance Cosine Similarity
DANGCEM - ZENITHBANK 1.0532 22.2155 0.0664
DANGCEM - GTCO 1.0527 21.7883 0.0336
ZENITHBANK - GTCO 0.7362 17.3105 0.5630

Download Similarity Measures

Explanation:

  • Lower Euclidean and Manhattan distances indicate more similar return behavior.
  • Higher Cosine Similarity (closer to 1) means the stocks move more in the same direction.
  • ZENITHBANK and GTCO are more similar to each other, while DANGCEM behaves quite differently.

Key Findings

Performance Summary

  • DANGCEM demonstrated the strongest risk-adjusted performance with competitive returns and the lowest volatility among the three stocks, resulting in the highest Sharpe Ratio.
  • ZENITHBANK delivered similar returns to DANGCEM but carried higher volatility, while
  • GTCO recorded the lowest returns among the three with moderate volatility.

Similarity and Diversification

  • ZENITHBANK and GTCO (both from the Financial Services sector) exhibited moderate similarity in their return patterns (Cosine Similarity ≈ 0.563).
  • DANGCEM showed very low similarity with both banking stocks (Cosine Similarity < 0.07), indicating strong diversification potential when combined with banking stocks.

Distribution Characteristics

  • All three stocks displayed negative skewness, suggesting a higher likelihood of extreme negative returns.
  • Returns are not normally distributed (Jarque-Bera p-value = 0.0 for all stocks), which is typical in equity markets.

Technologies Used

  • Python, pandas, NumPy, Matplotlib, Seaborn

Full Analysis

For the complete breakdown, code, detailed analysis, visualizations, and findings, please see the full Jupyter Notebook: equities_performance_analysis.ipynb

All generated charts have been exported as PNG files into the outputs/ folder.

Conclusion

DANGCEM demonstrated superior risk-adjusted performance over the 5-year period. The low correlation between DANGCEM and the banking stocks (GTCO & ZENITHBANK) suggests that a diversified portfolio combining Industrial Goods and Financial Services stocks could offer better risk management in the Nigerian market. This kind of analysis helps investors and portfolio managers make more informed decisions when constructing portfolios, balancing return potential with risk exposure in emerging markets like Nigeria.

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Last Updated: 04 July 2026