Correlation Between WEMA BANK and CORONATION INSURANCE
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By analyzing existing cross correlation between WEMA BANK PLC and CORONATION INSURANCE PLC, you can compare the effects of market volatilities on WEMA BANK and CORONATION 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 CORONATION INSURANCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of WEMA BANK and CORONATION INSURANCE.
Diversification Opportunities for WEMA BANK and CORONATION INSURANCE
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between WEMA and CORONATION is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding WEMA BANK PLC and CORONATION INSURANCE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CORONATION 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 CORONATION INSURANCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CORONATION INSURANCE PLC has no effect on the direction of WEMA BANK i.e., WEMA BANK and CORONATION INSURANCE go up and down completely randomly.
Pair Corralation between WEMA BANK and CORONATION INSURANCE
Assuming the 90 days trading horizon WEMA BANK is expected to generate 4.53 times less return on investment than CORONATION INSURANCE. But when comparing it to its historical volatility, WEMA BANK PLC is 1.51 times less risky than CORONATION INSURANCE. It trades about 0.06 of its potential returns per unit of risk. CORONATION INSURANCE PLC is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 66.00 in CORONATION INSURANCE PLC on September 19, 2024 and sell it today you would earn a total of 88.00 from holding CORONATION INSURANCE PLC or generate 133.33% 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. CORONATION INSURANCE PLC
Performance |
| Timeline |
| WEMA BANK PLC |
| CORONATION INSURANCE PLC |
WEMA BANK and CORONATION INSURANCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with WEMA BANK and CORONATION INSURANCE
The main advantage of trading using opposite WEMA BANK and CORONATION INSURANCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if WEMA BANK position performs unexpectedly, CORONATION 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 CORONATION INSURANCE will offset losses from the drop in CORONATION INSURANCE's long position.| WEMA BANK vs. NEM INSURANCE PLC | WEMA BANK vs. LIVINGTRUST MORTGAGE BANK | WEMA BANK vs. ZENITH BANK PLC | WEMA BANK vs. TRANSCORP HOTELS 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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