Correlation Between Guaranty Trust and State Bank
Can any of the company-specific risk be diversified away by investing in both Guaranty Trust and State 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 Guaranty Trust and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guaranty Trust Holding and State Bank of, you can compare the effects of market volatilities on Guaranty Trust and State 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 Guaranty Trust with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and State Bank.
Diversification Opportunities for Guaranty Trust and State Bank
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Guaranty and State is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Guaranty Trust 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 Guaranty Trust Holding are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Guaranty Trust i.e., Guaranty Trust and State Bank go up and down completely randomly.
Pair Corralation between Guaranty Trust and State Bank
Assuming the 90 days trading horizon Guaranty Trust Holding is expected to under-perform the State Bank. In addition to that, Guaranty Trust is 1.97 times more volatile than State Bank of. It trades about 0.0 of its total potential returns per unit of risk. State Bank of is currently generating about 0.07 per unit of volatility. If you would invest 6,905 in State Bank of on September 1, 2024 and sell it today you would earn a total of 3,065 from holding State Bank of or generate 44.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Guaranty Trust Holding vs. State Bank of
Performance |
| Timeline |
| Guaranty Trust Holding |
| State Bank |
Guaranty Trust and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guaranty Trust and State Bank
The main advantage of trading using opposite Guaranty Trust and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Trust position performs unexpectedly, State 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 State Bank will offset losses from the drop in State Bank's long position.| Guaranty Trust vs. Aeorema Communications Plc | Guaranty Trust vs. Cairo Communication SpA | Guaranty Trust vs. Take Two Interactive Software | Guaranty Trust vs. Impax Asset Management |
| State Bank vs. Medical Properties Trust | State Bank vs. Litigation Capital Management | State Bank vs. Impax Asset Management | State Bank vs. Tatton Asset Management |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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