Correlation Between TRUST BANK and SIC INSURANCE
Can any of the company-specific risk be diversified away by investing in both TRUST BANK and SIC INSURANCE 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 TRUST BANK and SIC INSURANCE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRUST BANK LIMITED and SIC INSURANCE ANY, you can compare the effects of market volatilities on TRUST BANK and SIC INSURANCE 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 TRUST BANK with a short position of SIC INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRUST BANK and SIC INSURANCE.
Diversification Opportunities for TRUST BANK and SIC INSURANCE
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRUST and SIC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRUST BANK LIMITED and SIC INSURANCE ANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIC INSURANCE ANY and TRUST BANK 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 TRUST BANK LIMITED are associated (or correlated) with SIC INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIC INSURANCE ANY has no effect on the direction of TRUST BANK i.e., TRUST BANK and SIC INSURANCE go up and down completely randomly.
Pair Corralation between TRUST BANK and SIC INSURANCE
Assuming the 90 days trading horizon TRUST BANK LIMITED is expected to generate 0.12 times more return on investment than SIC INSURANCE. However, TRUST BANK LIMITED is 8.24 times less risky than SIC INSURANCE. It trades about 0.06 of its potential returns per unit of risk. SIC INSURANCE ANY is currently generating about -0.04 per unit of risk. If you would invest 80.00 in TRUST BANK LIMITED on August 31, 2024 and sell it today you would earn a total of 3.00 from holding TRUST BANK LIMITED or generate 3.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRUST BANK LIMITED vs. SIC INSURANCE ANY
Performance |
| Timeline |
| TRUST BANK LIMITED |
| SIC INSURANCE ANY |
TRUST BANK and SIC INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRUST BANK and SIC INSURANCE
The main advantage of trading using opposite TRUST BANK and SIC INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRUST BANK position performs unexpectedly, SIC INSURANCE 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 SIC INSURANCE will offset losses from the drop in SIC INSURANCE's long position.| TRUST BANK vs. ECOBANK GHANA LIMITED | TRUST BANK vs. STANDARD CHARTERED BANK | TRUST BANK vs. SIC INSURANCE ANY | TRUST BANK vs. AGRICULTURAL DEVELOPMENT BANK |
| SIC INSURANCE vs. REPUBLIC BANK LIMITED | SIC INSURANCE vs. TRUST BANK LIMITED | SIC INSURANCE vs. SAMBA FOODS LIMITED | SIC INSURANCE vs. STANDARD CHARTERED BANK |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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