Correlation Between BOC Hong and Standard Bank
Can any of the company-specific risk be diversified away by investing in both BOC Hong 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 BOC Hong and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BOC Hong Kong and Standard Bank Group, you can compare the effects of market volatilities on BOC Hong 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 BOC Hong with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of BOC Hong and Standard Bank.
Diversification Opportunities for BOC Hong and Standard Bank
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between BOC and Standard is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding BOC Hong Kong 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 BOC Hong 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 BOC Hong Kong 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 BOC Hong i.e., BOC Hong and Standard Bank go up and down completely randomly.
Pair Corralation between BOC Hong and Standard Bank
Assuming the 90 days horizon BOC Hong Kong is expected to under-perform the Standard Bank. But the pink sheet apears to be less risky and, when comparing its historical volatility, BOC Hong Kong is 1.19 times less risky than Standard Bank. The pink sheet trades about -0.11 of its potential returns per unit of risk. The Standard Bank Group is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest 1,207 in Standard Bank Group on October 25, 2024 and sell it today you would lose (5.00) from holding Standard Bank Group or give up 0.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
BOC Hong Kong vs. Standard Bank Group
Performance |
| Timeline |
| BOC Hong Kong |
| Standard Bank Group |
BOC Hong and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BOC Hong and Standard Bank
The main advantage of trading using opposite BOC Hong and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BOC Hong 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.| BOC Hong vs. Bank of the | BOC Hong vs. China Merchants Bank | BOC Hong vs. BDO Unibank ADR | BOC Hong vs. Bangkok Bank PCL |
| Standard Bank vs. Bank Central Asia | Standard Bank vs. Nedbank Group | Standard Bank vs. Kasikornbank Public Co | Standard Bank vs. KBC Groep NV |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |