Correlation Between ZENITH BANK and NPF MICRO
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By analyzing existing cross correlation between ZENITH BANK PLC and NPF MICRO FINANCE, you can compare the effects of market volatilities on ZENITH BANK and NPF MICRO 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 NPF MICRO. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZENITH BANK and NPF MICRO.
Diversification Opportunities for ZENITH BANK and NPF MICRO
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between ZENITH and NPF is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding ZENITH BANK PLC and NPF MICRO FINANCE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NPF MICRO FINANCE 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 NPF MICRO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NPF MICRO FINANCE has no effect on the direction of ZENITH BANK i.e., ZENITH BANK and NPF MICRO go up and down completely randomly.
Pair Corralation between ZENITH BANK and NPF MICRO
Assuming the 90 days trading horizon ZENITH BANK PLC is expected to generate 1.6 times more return on investment than NPF MICRO. However, ZENITH BANK is 1.6 times more volatile than NPF MICRO FINANCE. It trades about -0.03 of its potential returns per unit of risk. NPF MICRO FINANCE is currently generating about -0.19 per unit of risk. If you would invest 4,780 in ZENITH BANK PLC on January 26, 2025 and sell it today you would lose (130.00) from holding ZENITH BANK PLC or give up 2.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZENITH BANK PLC vs. NPF MICRO FINANCE
Performance |
| Timeline |
| ZENITH BANK PLC |
| NPF MICRO FINANCE |
ZENITH BANK and NPF MICRO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZENITH BANK and NPF MICRO
The main advantage of trading using opposite ZENITH BANK and NPF MICRO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZENITH BANK position performs unexpectedly, NPF MICRO 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 NPF MICRO will offset losses from the drop in NPF MICRO's long position.| ZENITH BANK vs. AFRICAN ALLIANCE INSURANCE | ZENITH BANK vs. INDUSTRIAL MEDICAL GASES | ZENITH BANK vs. ASO SAVINGS AND | ZENITH BANK vs. CUSTODIAN INVESTMENT PLC |
| NPF MICRO vs. NEM INSURANCE PLC | NPF MICRO vs. AFROMEDIA PLC | NPF MICRO vs. CORNERSTONE INSURANCE PLC | NPF MICRO vs. AFRICAN ALLIANCE INSURANCE |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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