Correlation Between Bank of the and STI Education
Can any of the company-specific risk be diversified away by investing in both Bank of the and STI Education 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 Bank of the and STI Education into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank of the and STI Education Systems, you can compare the effects of market volatilities on Bank of the and STI Education 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 Bank of the with a short position of STI Education. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank of the and STI Education.
Diversification Opportunities for Bank of the and STI Education
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Bank and STI is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Bank of the and STI Education Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STI Education Systems and Bank of the 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 Bank of the are associated (or correlated) with STI Education. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STI Education Systems has no effect on the direction of Bank of the i.e., Bank of the and STI Education go up and down completely randomly.
Pair Corralation between Bank of the and STI Education
Assuming the 90 days trading horizon Bank of the is expected to generate 7.63 times less return on investment than STI Education. But when comparing it to its historical volatility, Bank of the is 1.55 times less risky than STI Education. It trades about 0.02 of its potential returns per unit of risk. STI Education Systems is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 104.00 in STI Education Systems on November 2, 2024 and sell it today you would earn a total of 36.00 from holding STI Education Systems or generate 34.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bank of the vs. STI Education Systems
Performance |
| Timeline |
| Bank of the |
| STI Education Systems |
Bank of the and STI Education Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bank of the and STI Education
The main advantage of trading using opposite Bank of the and STI Education positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank of the position performs unexpectedly, STI Education 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 STI Education will offset losses from the drop in STI Education's long position.| Bank of the vs. Allhome Corp | Bank of the vs. Atlas Consolidated Mining | Bank of the vs. Philex Mining Corp | Bank of the vs. Apex Mining Co |
| STI Education vs. Converge Information Communications | STI Education vs. First Abacus Financial | STI Education vs. Allhome Corp | STI Education vs. Altus Property Ventures |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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