Correlation Between Fortress Income and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Fortress Income 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 Fortress Income and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fortress Income and Standard Bank Group, you can compare the effects of market volatilities on Fortress Income 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 Fortress Income with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortress Income and Standard Bank.
Diversification Opportunities for Fortress Income and Standard Bank
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fortress and Standard is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Fortress Income 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 Fortress Income 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 Fortress Income 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 Fortress Income i.e., Fortress Income and Standard Bank go up and down completely randomly.
Pair Corralation between Fortress Income and Standard Bank
Assuming the 90 days trading horizon Fortress Income is expected to generate 0.67 times more return on investment than Standard Bank. However, Fortress Income is 1.48 times less risky than Standard Bank. It trades about 0.29 of its potential returns per unit of risk. Standard Bank Group is currently generating about -0.01 per unit of risk. If you would invest 189,600 in Fortress Income on September 12, 2024 and sell it today you would earn a total of 13,300 from holding Fortress Income or generate 7.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Fortress Income vs. Standard Bank Group
Performance |
| Timeline |
| Fortress Income |
| Standard Bank Group |
Fortress Income and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fortress Income and Standard Bank
The main advantage of trading using opposite Fortress Income and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fortress Income 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.| Fortress Income vs. AfroCentric Investment Corp | Fortress Income vs. Zeder Investments | Fortress Income vs. ABSA Bank Limited | Fortress Income vs. Advtech |
| Standard Bank vs. Harmony Gold Mining | Standard Bank vs. Astral Foods | Standard Bank vs. HomeChoice Investments | Standard Bank vs. Ascendis Health |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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