Correlation Between NATION MEDIA and STANBIC BANK
Can any of the company-specific risk be diversified away by investing in both NATION MEDIA and STANBIC 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 NATION MEDIA and STANBIC BANK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NATION MEDIA GROUP and STANBIC BANK HOLDINGS, you can compare the effects of market volatilities on NATION MEDIA and STANBIC 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 NATION MEDIA with a short position of STANBIC BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of NATION MEDIA and STANBIC BANK.
Diversification Opportunities for NATION MEDIA and STANBIC BANK
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between NATION and STANBIC is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding NATION MEDIA GROUP and STANBIC BANK HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANBIC BANK HOLDINGS and NATION MEDIA 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 NATION MEDIA GROUP are associated (or correlated) with STANBIC BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANBIC BANK HOLDINGS has no effect on the direction of NATION MEDIA i.e., NATION MEDIA and STANBIC BANK go up and down completely randomly.
Pair Corralation between NATION MEDIA and STANBIC BANK
Assuming the 90 days trading horizon NATION MEDIA GROUP is expected to generate 2.94 times more return on investment than STANBIC BANK. However, NATION MEDIA is 2.94 times more volatile than STANBIC BANK HOLDINGS. It trades about 0.16 of its potential returns per unit of risk. STANBIC BANK HOLDINGS is currently generating about -0.29 per unit of risk. If you would invest 37,466 in NATION MEDIA GROUP on November 28, 2024 and sell it today you would earn a total of 2,578 from holding NATION MEDIA GROUP or generate 6.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NATION MEDIA GROUP vs. STANBIC BANK HOLDINGS
Performance |
| Timeline |
| NATION MEDIA GROUP |
| STANBIC BANK HOLDINGS |
NATION MEDIA and STANBIC BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NATION MEDIA and STANBIC BANK
The main advantage of trading using opposite NATION MEDIA and STANBIC BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NATION MEDIA position performs unexpectedly, STANBIC 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 STANBIC BANK will offset losses from the drop in STANBIC BANK's long position.| NATION MEDIA vs. KCB GROUP LTD | NATION MEDIA vs. BRITISH AMERICAN TOBACCO | NATION MEDIA vs. BANK OF BARODA | NATION MEDIA vs. MTN UGANDA LIMITED |
| STANBIC BANK vs. CENTUM INVESTMENT PANY | STANBIC BANK vs. BANK OF BARODA | STANBIC BANK vs. BRITISH AMERICAN TOBACCO |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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