Correlation Between WEMA BANK and UNIVERSAL INSURANCE
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By analyzing existing cross correlation between WEMA BANK PLC and UNIVERSAL INSURANCE PANY, you can compare the effects of market volatilities on WEMA BANK and UNIVERSAL 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 UNIVERSAL INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEMA BANK and UNIVERSAL INSURANCE.
Diversification Opportunities for WEMA BANK and UNIVERSAL INSURANCE
-0.65 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between WEMA and UNIVERSAL is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding WEMA BANK PLC and UNIVERSAL INSURANCE PANY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVERSAL INSURANCE PANY 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 UNIVERSAL INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVERSAL INSURANCE PANY has no effect on the direction of WEMA BANK i.e., WEMA BANK and UNIVERSAL INSURANCE go up and down completely randomly.
Pair Corralation between WEMA BANK and UNIVERSAL INSURANCE
Assuming the 90 days trading horizon WEMA BANK PLC is expected to generate 0.56 times more return on investment than UNIVERSAL INSURANCE. However, WEMA BANK PLC is 1.77 times less risky than UNIVERSAL INSURANCE. It trades about 0.17 of its potential returns per unit of risk. UNIVERSAL INSURANCE PANY is currently generating about 0.09 per unit of risk. If you would invest 790.00 in WEMA BANK PLC on September 12, 2024 and sell it today you would earn a total of 70.00 from holding WEMA BANK PLC or generate 8.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
WEMA BANK PLC vs. UNIVERSAL INSURANCE PANY
Performance |
| Timeline |
| WEMA BANK PLC |
| UNIVERSAL INSURANCE PANY |
WEMA BANK and UNIVERSAL INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEMA BANK and UNIVERSAL INSURANCE
The main advantage of trading using opposite WEMA BANK and UNIVERSAL INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEMA BANK position performs unexpectedly, UNIVERSAL 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 UNIVERSAL INSURANCE will offset losses from the drop in UNIVERSAL INSURANCE's long position.| WEMA BANK vs. TOTALENERGIES MARKETING NIGERIA | WEMA BANK vs. SOVEREIGN TRUST INSURANCE | WEMA BANK vs. GOLDEN GUINEA BREWERIES | WEMA BANK vs. GUINEA 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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