Correlation Between Standard Bank and MC Mining
Can any of the company-specific risk be diversified away by investing in both Standard Bank and MC Mining 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 Standard Bank and MC Mining into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Standard Bank Group and MC Mining, you can compare the effects of market volatilities on Standard Bank and MC Mining 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 Standard Bank with a short position of MC Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and MC Mining.
Diversification Opportunities for Standard Bank and MC Mining
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Standard and MCZ is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and MC Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MC Mining and Standard 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 Standard Bank Group are associated (or correlated) with MC Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MC Mining has no effect on the direction of Standard Bank i.e., Standard Bank and MC Mining go up and down completely randomly.
Pair Corralation between Standard Bank and MC Mining
Assuming the 90 days trading horizon Standard Bank Group is expected to generate 0.29 times more return on investment than MC Mining. However, Standard Bank Group is 3.48 times less risky than MC Mining. It trades about 0.07 of its potential returns per unit of risk. MC Mining is currently generating about 0.01 per unit of risk. If you would invest 1,814,851 in Standard Bank Group on September 14, 2024 and sell it today you would earn a total of 472,749 from holding Standard Bank Group or generate 26.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Standard Bank Group vs. MC Mining
Performance |
| Timeline |
| Standard Bank Group |
| MC Mining |
Standard Bank and MC Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and MC Mining
The main advantage of trading using opposite Standard Bank and MC Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, MC Mining 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 MC Mining will offset losses from the drop in MC Mining's long position.| Standard Bank vs. MC Mining | Standard Bank vs. Bytes Technology | Standard Bank vs. Standard Bank Group | Standard Bank vs. We Buy Cars |
| MC Mining vs. Sasol Ltd Bee | MC Mining vs. Centaur Bci Balanced | MC Mining vs. Growthpoint Properties | MC Mining vs. Coronation Global Equity |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |