Correlation Between STERLING FINANCIAL and WEMA BANK
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By analyzing existing cross correlation between STERLING FINANCIAL HOLDINGS and WEMA BANK PLC, you can compare the effects of market volatilities on STERLING FINANCIAL 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 STERLING FINANCIAL with a short position of WEMA BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of STERLING FINANCIAL and WEMA BANK.
Diversification Opportunities for STERLING FINANCIAL and WEMA BANK
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between STERLING and WEMA is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding STERLING FINANCIAL HOLDINGS 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 STERLING FINANCIAL 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 STERLING FINANCIAL HOLDINGS 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 STERLING FINANCIAL i.e., STERLING FINANCIAL and WEMA BANK go up and down completely randomly.
Pair Corralation between STERLING FINANCIAL and WEMA BANK
Assuming the 90 days trading horizon STERLING FINANCIAL is expected to generate 1.63 times less return on investment than WEMA BANK. In addition to that, STERLING FINANCIAL is 1.03 times more volatile than WEMA BANK PLC. It trades about 0.13 of its total potential returns per unit of risk. WEMA BANK PLC is currently generating about 0.22 per unit of volatility. If you would invest 1,395 in WEMA BANK PLC on June 7, 2025 and sell it today you would earn a total of 785.00 from holding WEMA BANK PLC or generate 56.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
STERLING FINANCIAL HOLDINGS vs. WEMA BANK PLC
Performance |
| Timeline |
| STERLING FINANCIAL |
| WEMA BANK PLC |
STERLING FINANCIAL and WEMA BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STERLING FINANCIAL and WEMA BANK
The main advantage of trading using opposite STERLING FINANCIAL and WEMA BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STERLING FINANCIAL 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.| STERLING FINANCIAL vs. VETIVA BANKING ETF | STERLING FINANCIAL vs. UNITY BANK PLC | STERLING FINANCIAL vs. NIGERIAN BREWERIES PLC | STERLING FINANCIAL vs. ZENITH BANK PLC |
| WEMA BANK vs. BUA FOODS PLC | WEMA BANK vs. STACO INSURANCE PLC | WEMA BANK vs. INTERNATIONAL BREWERIES PLC | WEMA BANK vs. FORTIS GLOBAL 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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