Correlation Between FIDELITY BANK and AIICO INSURANCE
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By analyzing existing cross correlation between FIDELITY BANK PLC and AIICO INSURANCE PLC, you can compare the effects of market volatilities on FIDELITY BANK and AIICO INSURANCE 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 FIDELITY BANK with a short position of AIICO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of FIDELITY BANK and AIICO INSURANCE.
Diversification Opportunities for FIDELITY BANK and AIICO INSURANCE
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FIDELITY and AIICO is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding FIDELITY BANK PLC and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and FIDELITY BANK 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 FIDELITY BANK PLC are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of FIDELITY BANK i.e., FIDELITY BANK and AIICO INSURANCE go up and down completely randomly.
Pair Corralation between FIDELITY BANK and AIICO INSURANCE
Assuming the 90 days trading horizon FIDELITY BANK PLC is expected to generate 1.04 times more return on investment than AIICO INSURANCE. However, FIDELITY BANK is 1.04 times more volatile than AIICO INSURANCE PLC. It trades about 0.07 of its potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.07 per unit of risk. If you would invest 915.00 in FIDELITY BANK PLC on September 2, 2024 and sell it today you would earn a total of 615.00 from holding FIDELITY BANK PLC or generate 67.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FIDELITY BANK PLC vs. AIICO INSURANCE PLC
Performance |
| Timeline |
| FIDELITY BANK PLC |
| AIICO INSURANCE PLC |
FIDELITY BANK and AIICO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FIDELITY BANK and AIICO INSURANCE
The main advantage of trading using opposite FIDELITY BANK and AIICO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FIDELITY BANK position performs unexpectedly, AIICO INSURANCE 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 AIICO INSURANCE will offset losses from the drop in AIICO INSURANCE's long position.The idea behind FIDELITY BANK PLC and AIICO INSURANCE PLC pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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