Correlation Between Standard Bank and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Standard Bank 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 Standard Bank and Standard Bank 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 Standard Bank Group, you can compare the effects of market volatilities on Standard Bank 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 Standard Bank with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Standard Bank.
Diversification Opportunities for Standard Bank and Standard Bank
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Standard and Standard is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group 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 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 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 Standard Bank i.e., Standard Bank and Standard Bank go up and down completely randomly.
Pair Corralation between Standard Bank and Standard Bank
Assuming the 90 days trading horizon Standard Bank is expected to generate 2.28 times less return on investment than Standard Bank. But when comparing it to its historical volatility, Standard Bank Group is 1.3 times less risky than Standard Bank. It trades about 0.04 of its potential returns per unit of risk. Standard Bank Group is currently generating about 0.07 of returns per unit of risk over similar time horizon. 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 | 100.0% |
| Values | Daily Returns |
Standard Bank Group vs. Standard Bank Group
Performance |
| Timeline |
| Standard Bank Group |
| Standard Bank Group |
Standard Bank and Standard Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Standard Bank
The main advantage of trading using opposite Standard Bank and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank 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.| Standard Bank vs. Kap Industrial Holdings | Standard Bank vs. Datatec | Standard Bank vs. Kumba Iron Ore | Standard Bank vs. Copper 360 |
| Standard Bank vs. MC Mining | Standard Bank vs. Bytes Technology | Standard Bank vs. Standard Bank Group | Standard Bank vs. We Buy Cars |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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