Performances of the Industrial, Oil and Gas and the Insurance Sectors in Nigeria – A Correlational Analysis

Abstract

This paper comparatively examines the performances of Nigeria’s Oil and Gas, Insurance and the Industrial Sectors using their Market Capitalization for a period of 2009-2015 sourced from the Nigerian Stock Exchange. Augmented Dickey-Fuller Test was used to ensure the stationarity of the distribution by means of differencing, ANOVA for the analysis of variances while Pearson Correlation was employed to empirically establish the direction and strength of relationships between sectors’ performances. Findings showed that the industrial sector’s market capitalization consistently reduces as that of the oil and gas sector increases, given a significant strong negative correlation coefficient of -0.738 for the relationship between them. As trend analysis also showed that the performances of the oil and gas sector has been declining since the latter years under review (2014/2015), the paper recommended economic diversification through development of other sectors, particularly the industrial sector.

Keywords: Oil and Gas Sector, Insurance Sector, Industrial Sector, and  Market Capitalization

JEL CLASSIFICATION: G10, G15,  G19,.