Correlation Between State Bank and Mkango Resources

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Can any of the company-specific risk be diversified away by investing in both State Bank and Mkango Resources 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 State Bank and Mkango Resources into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Mkango Resources, you can compare the effects of market volatilities on State Bank and Mkango Resources 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 State Bank with a short position of Mkango Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Mkango Resources.

Diversification Opportunities for State Bank and Mkango Resources

StateMkangoDiversified AwayStateMkangoDiversified Away100%
-0.78
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between State and Mkango is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Mkango Resources in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mkango Resources and State Bank 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 State Bank of are associated (or correlated) with Mkango Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mkango Resources has no effect on the direction of State Bank i.e., State Bank and Mkango Resources go up and down completely randomly.

Pair Corralation between State Bank and Mkango Resources

Assuming the 90 days trading horizon State Bank of is expected to under-perform the Mkango Resources. But the stock apears to be less risky and, when comparing its historical volatility, State Bank of is 3.75 times less risky than Mkango Resources. The stock trades about -0.31 of its potential returns per unit of risk. The Mkango Resources is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest  875.00  in Mkango Resources on November 30, 2024 and sell it today you would earn a total of  125.00  from holding Mkango Resources or generate 14.29% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

State Bank of  vs.  Mkango Resources

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20020406080100
JavaScript chart by amCharts 3.21.15SBID MKA
       Timeline  
State Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.
JavaScript chart by amCharts 3.21.15JanFebFeb80859095100
Mkango Resources 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Mkango Resources are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Mkango Resources exhibited solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15JanFebFeb789101112

State Bank and Mkango Resources Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.19-1.72-1.25-0.78-0.310.09460.561.031.51.97 0.050.100.150.200.25
JavaScript chart by amCharts 3.21.15SBID MKA
       Returns  

Pair Trading with State Bank and Mkango Resources

The main advantage of trading using opposite State Bank and Mkango Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Mkango Resources 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 Mkango Resources will offset losses from the drop in Mkango Resources' long position.
The idea behind State Bank of and Mkango Resources pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.

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