Correlation Between SECURE ELECTRONIC and WEMA BANK
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By analyzing existing cross correlation between SECURE ELECTRONIC TECHNOLOGY and WEMA BANK PLC, you can compare the effects of market volatilities on SECURE ELECTRONIC 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 SECURE ELECTRONIC with a short position of WEMA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SECURE ELECTRONIC and WEMA BANK.
Diversification Opportunities for SECURE ELECTRONIC and WEMA BANK
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SECURE and WEMA is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding SECURE ELECTRONIC TECHNOLOGY 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 SECURE ELECTRONIC 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 SECURE ELECTRONIC TECHNOLOGY 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 SECURE ELECTRONIC i.e., SECURE ELECTRONIC and WEMA BANK go up and down completely randomly.
Pair Corralation between SECURE ELECTRONIC and WEMA BANK
Assuming the 90 days trading horizon SECURE ELECTRONIC TECHNOLOGY is expected to under-perform the WEMA BANK. But the stock apears to be less risky and, when comparing its historical volatility, SECURE ELECTRONIC TECHNOLOGY is 1.04 times less risky than WEMA BANK. The stock trades about -0.15 of its potential returns per unit of risk. The WEMA BANK PLC is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 800.00 in WEMA BANK PLC on September 2, 2024 and sell it today you would earn a total of 75.00 from holding WEMA BANK PLC or generate 9.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SECURE ELECTRONIC TECHNOLOGY vs. WEMA BANK PLC
Performance |
| Timeline |
| SECURE ELECTRONIC |
| WEMA BANK PLC |
SECURE ELECTRONIC and WEMA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SECURE ELECTRONIC and WEMA BANK
The main advantage of trading using opposite SECURE ELECTRONIC and WEMA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SECURE ELECTRONIC 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.The idea behind SECURE ELECTRONIC TECHNOLOGY and WEMA BANK 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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