Correlation Between UNITED BANK and ZENITH BANK
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By analyzing existing cross correlation between UNITED BANK FOR and ZENITH BANK PLC, you can compare the effects of market volatilities on UNITED BANK 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 UNITED BANK with a short position of ZENITH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED BANK and ZENITH BANK.
Diversification Opportunities for UNITED BANK and ZENITH BANK
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between UNITED and ZENITH is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding UNITED BANK FOR 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 UNITED 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 UNITED BANK FOR 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 UNITED BANK i.e., UNITED BANK and ZENITH BANK go up and down completely randomly.
Pair Corralation between UNITED BANK and ZENITH BANK
Assuming the 90 days trading horizon UNITED BANK FOR is expected to generate 1.27 times more return on investment than ZENITH BANK. However, UNITED BANK is 1.27 times more volatile than ZENITH BANK PLC. It trades about 0.11 of its potential returns per unit of risk. ZENITH BANK PLC is currently generating about 0.06 per unit of risk. If you would invest 810.00 in UNITED BANK FOR on October 11, 2024 and sell it today you would earn a total of 2,590 from holding UNITED BANK FOR or generate 319.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED BANK FOR vs. ZENITH BANK PLC
Performance |
| Timeline |
| UNITED BANK FOR |
| ZENITH BANK PLC |
UNITED BANK and ZENITH BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED BANK and ZENITH BANK
The main advantage of trading using opposite UNITED BANK and ZENITH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED BANK 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.| UNITED BANK vs. MULTIVERSE MINING AND | UNITED BANK vs. AIICO INSURANCE PLC | UNITED BANK vs. CORNERSTONE INSURANCE PLC | UNITED BANK vs. NEM INSURANCE PLC |
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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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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