Correlation Between WEMA BANK and AIICO INSURANCE
Specify exactly 2 symbols:
By analyzing existing cross correlation between WEMA BANK PLC and AIICO INSURANCE PLC, you can compare the effects of market volatilities on WEMA BANK and AIICO 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 WEMA BANK with a short position of AIICO INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEMA BANK and AIICO INSURANCE.
Diversification Opportunities for WEMA BANK and AIICO INSURANCE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WEMA and AIICO is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding WEMA BANK PLC and AIICO INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AIICO INSURANCE PLC and WEMA 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 WEMA BANK PLC are associated (or correlated) with AIICO INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AIICO INSURANCE PLC has no effect on the direction of WEMA BANK i.e., WEMA BANK and AIICO INSURANCE go up and down completely randomly.
Pair Corralation between WEMA BANK and AIICO INSURANCE
Assuming the 90 days trading horizon WEMA BANK PLC is expected to generate 1.03 times more return on investment than AIICO INSURANCE. However, WEMA BANK is 1.03 times more volatile than AIICO INSURANCE PLC. It trades about 0.08 of its potential returns per unit of risk. AIICO INSURANCE PLC is currently generating about 0.07 per unit of risk. If you would invest 496.00 in WEMA BANK PLC on September 2, 2024 and sell it today you would earn a total of 379.00 from holding WEMA BANK PLC or generate 76.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEMA BANK PLC vs. AIICO INSURANCE PLC
Performance |
| Timeline |
| WEMA BANK PLC |
| AIICO INSURANCE PLC |
WEMA BANK and AIICO INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEMA BANK and AIICO INSURANCE
The main advantage of trading using opposite WEMA BANK and AIICO INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEMA BANK position performs unexpectedly, AIICO 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 AIICO INSURANCE will offset losses from the drop in AIICO INSURANCE's long position.The idea behind WEMA BANK PLC and AIICO INSURANCE 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance |