Correlation Between ZENITH BANK and UNION HOMES

Can any of the company-specific risk be diversified away by investing in both ZENITH BANK and UNION HOMES at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining ZENITH BANK and UNION HOMES into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ZENITH BANK PLC and UNION HOMES SAVINGS, you can compare the effects of market volatilities on ZENITH BANK and UNION HOMES 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 UNION HOMES. Check out your portfolio center. Please also check ongoing floating volatility patterns of ZENITH BANK and UNION HOMES.

Diversification Opportunities for ZENITH BANK and UNION HOMES

0.0

Correlation Coefficient

ZENITH BANK  UNION HOMES

Pay attention - limited upside

The 3 months correlation between ZENITH and UNION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ZENITH BANK PLC and UNION HOMES SAVINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNION HOMES SAVINGS 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 UNION HOMES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNION HOMES SAVINGS has no effect on the direction of ZENITH BANK i.e., ZENITH BANK and UNION HOMES go up and down completely randomly.

Pair Corralation between ZENITH BANK and UNION HOMES

If you would invest  3,570  in ZENITH BANK PLC on September 30, 2024 and sell it today you would earn a total of  1,025  from holding ZENITH BANK PLC or generate 28.71% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ZENITH BANK PLC  vs.  UNION HOMES SAVINGS

ZENITH BANK PLC

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in ZENITH BANK PLC are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat inconsistent basic indicators, ZENITH BANK sustained solid returns over the last few months and may actually be approaching a breakup point.

UNION HOMES SAVINGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days UNION HOMES SAVINGS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, UNION HOMES is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with ZENITH BANK and UNION HOMES

The main advantage of trading using opposite ZENITH BANK and UNION HOMES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ZENITH BANK position performs unexpectedly, UNION HOMES 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 UNION HOMES will offset losses from the drop in UNION HOMES's long position.

The idea behind ZENITH BANK PLC and UNION HOMES SAVINGS pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..