Correlation Between Hosken Consolidated and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Hosken Consolidated 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 Hosken Consolidated and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hosken Consolidated Investments and Standard Bank Group, you can compare the effects of market volatilities on Hosken Consolidated 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 Hosken Consolidated with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hosken Consolidated and Standard Bank.
Diversification Opportunities for Hosken Consolidated and Standard Bank
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hosken and Standard is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hosken Consolidated Investment 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 Hosken Consolidated 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 Hosken Consolidated Investments 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 Hosken Consolidated i.e., Hosken Consolidated and Standard Bank go up and down completely randomly.
Pair Corralation between Hosken Consolidated and Standard Bank
Assuming the 90 days trading horizon Hosken Consolidated Investments is expected to under-perform the Standard Bank. In addition to that, Hosken Consolidated is 1.35 times more volatile than Standard Bank Group. It trades about -0.02 of its total potential returns per unit of risk. Standard Bank Group is currently generating about 0.03 per unit of volatility. If you would invest 870,000 in Standard Bank Group on August 28, 2024 and sell it today you would earn a total of 75,000 from holding Standard Bank Group or generate 8.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hosken Consolidated Investment vs. Standard Bank Group
Performance |
| Timeline |
| Hosken Consolidated |
| Standard Bank Group |
Hosken Consolidated and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hosken Consolidated and Standard Bank
The main advantage of trading using opposite Hosken Consolidated and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hosken Consolidated 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.| Hosken Consolidated vs. Frontier Transport Holdings | Hosken Consolidated vs. HomeChoice Investments | Hosken Consolidated vs. Bytes Technology | Hosken Consolidated vs. Safari Investments RSA |
| Standard Bank vs. Investec Limited NON | Standard Bank vs. Sasol Ltd Bee | Standard Bank vs. Centaur Bci Balanced | Standard Bank vs. Sabvest Capital |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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