Correlation Between State Bank and Microlise Group
Can any of the company-specific risk be diversified away by investing in both State Bank and Microlise Group 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 Microlise Group 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 Microlise Group PLC, you can compare the effects of market volatilities on State Bank and Microlise Group 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 Microlise Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Microlise Group.
Diversification Opportunities for State Bank and Microlise Group
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Microlise is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Microlise Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Microlise Group PLC 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 Microlise Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Microlise Group PLC has no effect on the direction of State Bank i.e., State Bank and Microlise Group go up and down completely randomly.
Pair Corralation between State Bank and Microlise Group
Assuming the 90 days trading horizon State Bank of is expected to generate 0.46 times more return on investment than Microlise Group. However, State Bank of is 2.19 times less risky than Microlise Group. It trades about 0.02 of its potential returns per unit of risk. Microlise Group PLC is currently generating about -0.07 per unit of risk. If you would invest 9,850 in State Bank of on September 2, 2024 and sell it today you would earn a total of 120.00 from holding State Bank of or generate 1.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Microlise Group PLC
Performance |
| Timeline |
| State Bank |
| Microlise Group PLC |
State Bank and Microlise Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Microlise Group
The main advantage of trading using opposite State Bank and Microlise Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Microlise Group 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 Microlise Group will offset losses from the drop in Microlise Group's long position.| State Bank vs. Wyndham Hotels Resorts | State Bank vs. LBG Media PLC | State Bank vs. Supermarket Income REIT | State Bank vs. Auto Trader Group |
| Microlise Group vs. SupplyMe Capital PLC | Microlise Group vs. Lloyds Banking Group | Microlise Group vs. Premier African Minerals | Microlise Group vs. SANTANDER UK 8 |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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