Correlation Between ZENITH BANK and NORTHERN NIGERIA
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By analyzing existing cross correlation between ZENITH BANK PLC and NORTHERN NIGERIA FLOUR, you can compare the effects of market volatilities on ZENITH BANK and NORTHERN NIGERIA 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 ZENITH BANK with a short position of NORTHERN NIGERIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZENITH BANK and NORTHERN NIGERIA.
Diversification Opportunities for ZENITH BANK and NORTHERN NIGERIA
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ZENITH and NORTHERN is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding ZENITH BANK PLC and NORTHERN NIGERIA FLOUR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NORTHERN NIGERIA FLOUR and ZENITH 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 ZENITH BANK PLC are associated (or correlated) with NORTHERN NIGERIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NORTHERN NIGERIA FLOUR has no effect on the direction of ZENITH BANK i.e., ZENITH BANK and NORTHERN NIGERIA go up and down completely randomly.
Pair Corralation between ZENITH BANK and NORTHERN NIGERIA
Assuming the 90 days trading horizon ZENITH BANK PLC is expected to generate 0.4 times more return on investment than NORTHERN NIGERIA. However, ZENITH BANK PLC is 2.52 times less risky than NORTHERN NIGERIA. It trades about -0.31 of its potential returns per unit of risk. NORTHERN NIGERIA FLOUR is currently generating about -0.22 per unit of risk. If you would invest 5,080 in ZENITH BANK PLC on December 11, 2024 and sell it today you would lose (280.00) from holding ZENITH BANK PLC or give up 5.51% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZENITH BANK PLC vs. NORTHERN NIGERIA FLOUR
Performance |
| Timeline |
| ZENITH BANK PLC |
| NORTHERN NIGERIA FLOUR |
ZENITH BANK and NORTHERN NIGERIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZENITH BANK and NORTHERN NIGERIA
The main advantage of trading using opposite ZENITH BANK and NORTHERN NIGERIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZENITH BANK position performs unexpectedly, NORTHERN NIGERIA 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 NORTHERN NIGERIA will offset losses from the drop in NORTHERN NIGERIA's long position.| ZENITH BANK vs. BUA FOODS PLC | ZENITH BANK vs. DN TYRE RUBBER | ZENITH BANK vs. INDUSTRIAL MEDICAL GASES | ZENITH BANK vs. NOTORE CHEMICAL IND |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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