Correlation Between ABC TRANSPORT and ZENITH BANK
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By analyzing existing cross correlation between ABC TRANSPORT PLC and ZENITH BANK PLC, you can compare the effects of market volatilities on ABC TRANSPORT and ZENITH 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 ABC TRANSPORT with a short position of ZENITH BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of ABC TRANSPORT and ZENITH BANK.
Diversification Opportunities for ABC TRANSPORT and ZENITH BANK
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between ABC and ZENITH is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding ABC TRANSPORT PLC and ZENITH BANK PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZENITH BANK PLC and ABC TRANSPORT 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 ABC TRANSPORT PLC are associated (or correlated) with ZENITH BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZENITH BANK PLC has no effect on the direction of ABC TRANSPORT i.e., ABC TRANSPORT and ZENITH BANK go up and down completely randomly.
Pair Corralation between ABC TRANSPORT and ZENITH BANK
Assuming the 90 days trading horizon ABC TRANSPORT PLC is expected to under-perform the ZENITH BANK. In addition to that, ABC TRANSPORT is 2.74 times more volatile than ZENITH BANK PLC. It trades about -0.05 of its total potential returns per unit of risk. ZENITH BANK PLC is currently generating about 0.23 per unit of volatility. If you would invest 3,750 in ZENITH BANK PLC on October 19, 2024 and sell it today you would earn a total of 945.00 from holding ZENITH BANK PLC or generate 25.2% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 98.39% |
Values | Daily Returns |
ABC TRANSPORT PLC vs. ZENITH BANK PLC
Performance |
Timeline |
ABC TRANSPORT PLC |
ZENITH BANK PLC |
ABC TRANSPORT and ZENITH BANK Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with ABC TRANSPORT and ZENITH BANK
The main advantage of trading using opposite ABC TRANSPORT and ZENITH BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ABC TRANSPORT position performs unexpectedly, ZENITH 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 ZENITH BANK will offset losses from the drop in ZENITH BANK's long position.ABC TRANSPORT vs. STERLING FINANCIAL HOLDINGS | ||
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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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