Correlation Between NEM INSURANCE and ZENITH BANK
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By analyzing existing cross correlation between NEM INSURANCE PLC and ZENITH BANK PLC, you can compare the effects of market volatilities on NEM INSURANCE 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 NEM INSURANCE with a short position of ZENITH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEM INSURANCE and ZENITH BANK.
Diversification Opportunities for NEM INSURANCE and ZENITH BANK
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NEM and ZENITH is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding NEM INSURANCE PLC 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 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 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 NEM INSURANCE i.e., NEM INSURANCE and ZENITH BANK go up and down completely randomly.
Pair Corralation between NEM INSURANCE and ZENITH BANK
Assuming the 90 days trading horizon NEM INSURANCE is expected to generate 10.78 times less return on investment than ZENITH BANK. In addition to that, NEM INSURANCE is 2.07 times more volatile than ZENITH BANK PLC. It trades about 0.01 of its total potential returns per unit of risk. ZENITH BANK PLC is currently generating about 0.24 per unit of volatility. If you would invest 4,650 in ZENITH BANK PLC on November 4, 2024 and sell it today you would earn a total of 410.00 from holding ZENITH BANK PLC or generate 8.82% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEM INSURANCE PLC vs. ZENITH BANK PLC
Performance |
| Timeline |
| NEM INSURANCE PLC |
| ZENITH BANK PLC |
NEM INSURANCE and ZENITH BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEM INSURANCE and ZENITH BANK
The main advantage of trading using opposite NEM INSURANCE and ZENITH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEM INSURANCE 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.| NEM INSURANCE vs. LIVINGTRUST MORTGAGE BANK | NEM INSURANCE vs. MULTI TREX INTEGRATED FOODS | NEM INSURANCE vs. ABC TRANSPORT PLC | NEM INSURANCE vs. TRANSCORP HOTELS PLC |
| ZENITH BANK vs. GUINEA INSURANCE PLC | ZENITH BANK vs. SECURE ELECTRONIC TECHNOLOGY | ZENITH BANK vs. VFD GROUP | ZENITH BANK vs. IKEJA HOTELS PLC |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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