Correlation Between NEM INSURANCE and WEMA BANK
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By analyzing existing cross correlation between NEM INSURANCE PLC and WEMA BANK PLC, you can compare the effects of market volatilities on NEM INSURANCE and WEMA 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 NEM INSURANCE with a short position of WEMA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM INSURANCE and WEMA BANK.
Diversification Opportunities for NEM INSURANCE and WEMA BANK
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEM and WEMA is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding NEM INSURANCE PLC and WEMA BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEMA BANK PLC and NEM 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 NEM INSURANCE PLC are associated (or correlated) with WEMA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEMA BANK PLC has no effect on the direction of NEM INSURANCE i.e., NEM INSURANCE and WEMA BANK go up and down completely randomly.
Pair Corralation between NEM INSURANCE and WEMA BANK
Assuming the 90 days trading horizon NEM INSURANCE is expected to generate 2.89 times less return on investment than WEMA BANK. But when comparing it to its historical volatility, NEM INSURANCE PLC is 1.03 times less risky than WEMA BANK. It trades about 0.03 of its potential returns per unit of risk. WEMA BANK PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 685.00 in WEMA BANK PLC on September 5, 2024 and sell it today you would earn a total of 185.00 from holding WEMA BANK PLC or generate 27.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.19% |
| Values | Daily Returns |
NEM INSURANCE PLC vs. WEMA BANK PLC
Performance |
| Timeline |
| NEM INSURANCE PLC |
| WEMA BANK PLC |
NEM INSURANCE and WEMA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM INSURANCE and WEMA BANK
The main advantage of trading using opposite NEM INSURANCE and WEMA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM INSURANCE position performs unexpectedly, WEMA 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 WEMA BANK will offset losses from the drop in WEMA BANK's long position.| NEM INSURANCE vs. GUINEA INSURANCE PLC | NEM INSURANCE vs. VFD GROUP | NEM INSURANCE vs. VETIVA S P | NEM INSURANCE vs. GREENWICH ASSET ETF |
| WEMA BANK vs. NEM INSURANCE PLC | WEMA BANK vs. INTERNATIONAL ENERGY INSURANCE | WEMA BANK vs. CORNERSTONE INSURANCE PLC | WEMA BANK vs. UNION HOMES SAVINGS |
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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