Correlation Between C I and ZENITH BANK
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By analyzing existing cross correlation between C I LEASING and ZENITH BANK PLC, you can compare the effects of market volatilities on C I and ZENITH BANK 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 ZENITH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of C I and ZENITH BANK.
Diversification Opportunities for C I and ZENITH BANK
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CILEASING and ZENITH is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding C I LEASING and ZENITH BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENITH BANK PLC 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 ZENITH BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENITH BANK PLC has no effect on the direction of C I i.e., C I and ZENITH BANK go up and down completely randomly.
Pair Corralation between C I and ZENITH BANK
Assuming the 90 days trading horizon C I is expected to generate 1.12 times less return on investment than ZENITH BANK. In addition to that, C I is 1.65 times more volatile than ZENITH BANK PLC. It trades about 0.03 of its total potential returns per unit of risk. ZENITH BANK PLC is currently generating about 0.06 per unit of volatility. If you would invest 2,445 in ZENITH BANK PLC on October 11, 2024 and sell it today you would earn a total of 2,005 from holding ZENITH BANK PLC or generate 82.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
C I LEASING vs. ZENITH BANK PLC
Performance |
| Timeline |
| C I LEASING |
| ZENITH BANK PLC |
C I and ZENITH BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with C I and ZENITH BANK
The main advantage of trading using opposite C I and ZENITH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if C I position performs unexpectedly, ZENITH BANK 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 ZENITH BANK will offset losses from the drop in ZENITH BANK's long position.| C I vs. NEM INSURANCE PLC | C I vs. UNITY BANK PLC | C I vs. STACO INSURANCE PLC | C I vs. AIICO INSURANCE PLC |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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