Correlation Between WEMA BANK and NCR PLC
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By analyzing existing cross correlation between WEMA BANK PLC and NCR PLC, you can compare the effects of market volatilities on WEMA BANK and NCR PLC 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 NCR PLC. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEMA BANK and NCR PLC.
Diversification Opportunities for WEMA BANK and NCR PLC
Poor diversification
The 3 months correlation between WEMA and NCR is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding WEMA BANK PLC and NCR PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NCR 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 NCR PLC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NCR PLC has no effect on the direction of WEMA BANK i.e., WEMA BANK and NCR PLC go up and down completely randomly.
Pair Corralation between WEMA BANK and NCR PLC
Assuming the 90 days trading horizon WEMA BANK is expected to generate 1.4 times less return on investment than NCR PLC. But when comparing it to its historical volatility, WEMA BANK PLC is 1.29 times less risky than NCR PLC. It trades about 0.08 of its potential returns per unit of risk. NCR PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 432.00 in NCR PLC on September 21, 2024 and sell it today you would earn a total of 41.00 from holding NCR PLC or generate 9.49% 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. NCR PLC
Performance |
| Timeline |
| WEMA BANK PLC |
| NCR PLC |
WEMA BANK and NCR PLC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEMA BANK and NCR PLC
The main advantage of trading using opposite WEMA BANK and NCR PLC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEMA BANK position performs unexpectedly, NCR PLC 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 NCR PLC will offset losses from the drop in NCR PLC's long position.| WEMA BANK vs. GUINEA INSURANCE PLC | WEMA BANK vs. SECURE ELECTRONIC TECHNOLOGY | WEMA BANK vs. VFD GROUP | WEMA BANK vs. IKEJA HOTELS PLC |
| NCR PLC vs. WEMA BANK PLC | NCR PLC vs. UNION HOMES REAL | NCR PLC vs. CHAMPION BREWERIES PLC | NCR PLC vs. MULTIVERSE MINING AND |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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