Correlation Between Greenville Federal and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Greenville Federal 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 Greenville Federal and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Greenville Federal Financial and Standard Bank Group, you can compare the effects of market volatilities on Greenville Federal 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 Greenville Federal with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Greenville Federal and Standard Bank.
Diversification Opportunities for Greenville Federal and Standard Bank
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Greenville and Standard is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Greenville Federal Financial 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 Greenville Federal 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 Greenville Federal Financial 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 Greenville Federal i.e., Greenville Federal and Standard Bank go up and down completely randomly.
Pair Corralation between Greenville Federal and Standard Bank
Given the investment horizon of 90 days Greenville Federal Financial is expected to under-perform the Standard Bank. In addition to that, Greenville Federal is 1.37 times more volatile than Standard Bank Group. It trades about 0.0 of its total potential returns per unit of risk. Standard Bank Group is currently generating about 0.06 per unit of volatility. If you would invest 854.00 in Standard Bank Group on August 25, 2024 and sell it today you would earn a total of 502.00 from holding Standard Bank Group or generate 58.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Greenville Federal Financial vs. Standard Bank Group
Performance |
| Timeline |
| Greenville Federal |
| Standard Bank Group |
Greenville Federal and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Greenville Federal and Standard Bank
The main advantage of trading using opposite Greenville Federal and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Greenville Federal 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.| Greenville Federal vs. Standard Bank Group | Greenville Federal vs. Bank Central Asia | Greenville Federal vs. PSB Holdings | Greenville Federal vs. United Overseas Bank |
| Standard Bank vs. Bank Central Asia | Standard Bank vs. PSB Holdings | Standard Bank vs. United Overseas Bank | Standard Bank vs. Turkiye Garanti Bankasi |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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