Correlation Between NEWGOLD EXCHANGE and ZENITH BANK
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By analyzing existing cross correlation between NEWGOLD EXCHANGE TRADED and ZENITH BANK PLC, you can compare the effects of market volatilities on NEWGOLD EXCHANGE 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 NEWGOLD EXCHANGE with a short position of ZENITH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NEWGOLD EXCHANGE and ZENITH BANK.
Diversification Opportunities for NEWGOLD EXCHANGE and ZENITH BANK
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between NEWGOLD and ZENITH is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding NEWGOLD EXCHANGE TRADED 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 NEWGOLD EXCHANGE 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 NEWGOLD EXCHANGE TRADED 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 NEWGOLD EXCHANGE i.e., NEWGOLD EXCHANGE and ZENITH BANK go up and down completely randomly.
Pair Corralation between NEWGOLD EXCHANGE and ZENITH BANK
Assuming the 90 days trading horizon NEWGOLD EXCHANGE TRADED is expected to generate 3.56 times more return on investment than ZENITH BANK. However, NEWGOLD EXCHANGE is 3.56 times more volatile than ZENITH BANK PLC. It trades about 0.08 of its potential returns per unit of risk. ZENITH BANK PLC is currently generating about 0.05 per unit of risk. If you would invest 1,440,000 in NEWGOLD EXCHANGE TRADED on September 23, 2024 and sell it today you would earn a total of 1,560,000 from holding NEWGOLD EXCHANGE TRADED or generate 108.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
NEWGOLD EXCHANGE TRADED vs. ZENITH BANK PLC
Performance |
| Timeline |
| NEWGOLD EXCHANGE TRADED |
| ZENITH BANK PLC |
NEWGOLD EXCHANGE and ZENITH BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NEWGOLD EXCHANGE and ZENITH BANK
The main advantage of trading using opposite NEWGOLD EXCHANGE and ZENITH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NEWGOLD EXCHANGE 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.| NEWGOLD EXCHANGE vs. ZENITH BANK PLC | NEWGOLD EXCHANGE vs. GUINEA INSURANCE PLC | NEWGOLD EXCHANGE vs. SECURE ELECTRONIC TECHNOLOGY | NEWGOLD EXCHANGE vs. SFS REAL ESTATE |
| ZENITH BANK vs. GUINEA INSURANCE PLC | ZENITH BANK vs. SECURE ELECTRONIC TECHNOLOGY | ZENITH BANK vs. SFS REAL ESTATE | ZENITH BANK vs. CHELLARAMS 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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