Correlation Between ZENITH BANK and WEMA BANK
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By analyzing existing cross correlation between ZENITH BANK PLC and WEMA BANK PLC, you can compare the effects of market volatilities on ZENITH BANK and WEMA BANK 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 WEMA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZENITH BANK and WEMA BANK.
Diversification Opportunities for ZENITH BANK and WEMA BANK
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between ZENITH and WEMA is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding ZENITH BANK PLC and WEMA BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WEMA BANK PLC 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 WEMA BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WEMA BANK PLC has no effect on the direction of ZENITH BANK i.e., ZENITH BANK and WEMA BANK go up and down completely randomly.
Pair Corralation between ZENITH BANK and WEMA BANK
Assuming the 90 days trading horizon ZENITH BANK is expected to generate 2.62 times less return on investment than WEMA BANK. But when comparing it to its historical volatility, ZENITH BANK PLC is 1.85 times less risky than WEMA BANK. It trades about 0.05 of its potential returns per unit of risk. WEMA BANK PLC is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 850.00 in WEMA BANK PLC on September 19, 2024 and sell it today you would earn a total of 25.00 from holding WEMA BANK PLC or generate 2.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
ZENITH BANK PLC vs. WEMA BANK PLC
Performance |
| Timeline |
| ZENITH BANK PLC |
| WEMA BANK PLC |
ZENITH BANK and WEMA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ZENITH BANK and WEMA BANK
The main advantage of trading using opposite ZENITH BANK and WEMA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZENITH BANK position performs unexpectedly, WEMA BANK 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 WEMA BANK will offset losses from the drop in WEMA BANK's long position.| ZENITH BANK vs. GUINEA INSURANCE PLC | ZENITH BANK vs. SECURE ELECTRONIC TECHNOLOGY | ZENITH BANK vs. VFD GROUP | ZENITH BANK vs. IKEJA HOTELS PLC |
| WEMA BANK vs. NEM INSURANCE PLC | WEMA BANK vs. LIVINGTRUST MORTGAGE BANK | WEMA BANK vs. ZENITH BANK PLC | WEMA BANK vs. TRANSCORP HOTELS PLC |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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