Correlation Between Advtech and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Advtech and Standard Bank 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 Advtech and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Advtech and Standard Bank Group, you can compare the effects of market volatilities on Advtech and Standard 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 Advtech with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Advtech and Standard Bank.
Diversification Opportunities for Advtech and Standard Bank
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Advtech and Standard is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Advtech and Standard Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Bank Group and Advtech 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 Advtech are associated (or correlated) with Standard Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Bank Group has no effect on the direction of Advtech i.e., Advtech and Standard Bank go up and down completely randomly.
Pair Corralation between Advtech and Standard Bank
Assuming the 90 days trading horizon Advtech is expected to generate 0.68 times more return on investment than Standard Bank. However, Advtech is 1.48 times less risky than Standard Bank. It trades about 0.04 of its potential returns per unit of risk. Standard Bank Group is currently generating about 0.02 per unit of risk. If you would invest 317,200 in Advtech on August 28, 2024 and sell it today you would earn a total of 2,300 from holding Advtech or generate 0.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Advtech vs. Standard Bank Group
Performance |
| Timeline |
| Advtech |
| Standard Bank Group |
Advtech and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Advtech and Standard Bank
The main advantage of trading using opposite Advtech and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Advtech position performs unexpectedly, Standard 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 Standard Bank will offset losses from the drop in Standard Bank's long position.| Advtech vs. Centaur Bci Balanced | Advtech vs. Growthpoint Properties | Advtech vs. Bowler Metcalf | Advtech vs. Shoprite Holdings |
| Standard Bank vs. Investec Limited NON | Standard Bank vs. Sasol Ltd Bee | Standard Bank vs. Centaur Bci Balanced | Standard Bank vs. Sabvest Capital |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories |