Correlation Between STACO INSURANCE and WEMA BANK

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Can any of the company-specific risk be diversified away by investing in both STACO INSURANCE and WEMA BANK at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining STACO INSURANCE and WEMA BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STACO INSURANCE PLC and WEMA BANK PLC, you can compare the effects of market volatilities on STACO 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 STACO INSURANCE with a short position of WEMA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of STACO INSURANCE and WEMA BANK.

Diversification Opportunities for STACO INSURANCE and WEMA BANK

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between STACO and WEMA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding STACO 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 STACO 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 STACO 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 STACO INSURANCE i.e., STACO INSURANCE and WEMA BANK go up and down completely randomly.

Pair Corralation between STACO INSURANCE and WEMA BANK

If you would invest  865.00  in WEMA BANK PLC on October 13, 2024 and sell it today you would earn a total of  235.00  from holding WEMA BANK PLC or generate 27.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

STACO INSURANCE PLC  vs.  WEMA BANK PLC

 Performance 
       Timeline  
STACO INSURANCE PLC 

Risk-Adjusted Performance

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Over the last 90 days STACO INSURANCE PLC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, STACO INSURANCE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.
WEMA BANK PLC 

Risk-Adjusted Performance

15 of 100

 
Weak
 
Strong
Good
Compared to the overall equity markets, risk-adjusted returns on investments in WEMA BANK PLC are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, WEMA BANK displayed solid returns over the last few months and may actually be approaching a breakup point.

STACO INSURANCE and WEMA BANK Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with STACO INSURANCE and WEMA BANK

The main advantage of trading using opposite STACO INSURANCE and WEMA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STACO 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.
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The idea behind STACO INSURANCE PLC 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.
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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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