Correlation Between CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL
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By analyzing existing cross correlation between CORNERSTONE INSURANCE PLC and ECOBANK TRANSNATIONAL INCORPORATED, you can compare the effects of market volatilities on CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL 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 CORNERSTONE INSURANCE with a short position of ECOBANK TRANSNATIONAL. Check out your portfolio center. Please also check ongoing floating volatility patterns of CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL.
Diversification Opportunities for CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CORNERSTONE and ECOBANK is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding CORNERSTONE INSURANCE PLC and ECOBANK TRANSNATIONAL INCORPOR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ECOBANK TRANSNATIONAL and CORNERSTONE INSURANCE 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 CORNERSTONE INSURANCE PLC are associated (or correlated) with ECOBANK TRANSNATIONAL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ECOBANK TRANSNATIONAL has no effect on the direction of CORNERSTONE INSURANCE i.e., CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL go up and down completely randomly.
Pair Corralation between CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL
Assuming the 90 days trading horizon CORNERSTONE INSURANCE PLC is expected to generate 3.0 times more return on investment than ECOBANK TRANSNATIONAL. However, CORNERSTONE INSURANCE is 3.0 times more volatile than ECOBANK TRANSNATIONAL INCORPORATED. It trades about 0.08 of its potential returns per unit of risk. ECOBANK TRANSNATIONAL INCORPORATED is currently generating about 0.22 per unit of risk. If you would invest 327.00 in CORNERSTONE INSURANCE PLC on October 28, 2024 and sell it today you would earn a total of 21.00 from holding CORNERSTONE INSURANCE PLC or generate 6.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
CORNERSTONE INSURANCE PLC vs. ECOBANK TRANSNATIONAL INCORPOR
Performance |
| Timeline |
| CORNERSTONE INSURANCE PLC |
| ECOBANK TRANSNATIONAL |
CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL
The main advantage of trading using opposite CORNERSTONE INSURANCE and ECOBANK TRANSNATIONAL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CORNERSTONE INSURANCE position performs unexpectedly, ECOBANK TRANSNATIONAL 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 ECOBANK TRANSNATIONAL will offset losses from the drop in ECOBANK TRANSNATIONAL's long position.| CORNERSTONE INSURANCE vs. UNITY BANK PLC | CORNERSTONE INSURANCE vs. UNION HOMES SAVINGS | CORNERSTONE INSURANCE vs. CUSTODIAN INVESTMENT PLC | CORNERSTONE INSURANCE vs. TOTALENERGIES MARKETING NIGERIA |
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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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