Correlation Between Standard Bank and Tsogo Sun
Can any of the company-specific risk be diversified away by investing in both Standard Bank and Tsogo Sun 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 Tsogo Sun 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 Tsogo Sun, you can compare the effects of market volatilities on Standard Bank and Tsogo Sun 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 Tsogo Sun. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Tsogo Sun.
Diversification Opportunities for Standard Bank and Tsogo Sun
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Standard and Tsogo is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and Tsogo Sun in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tsogo Sun 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 Tsogo Sun. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tsogo Sun has no effect on the direction of Standard Bank i.e., Standard Bank and Tsogo Sun go up and down completely randomly.
Pair Corralation between Standard Bank and Tsogo Sun
Assuming the 90 days trading horizon Standard Bank Group is expected to generate 0.69 times more return on investment than Tsogo Sun. However, Standard Bank Group is 1.44 times less risky than Tsogo Sun. It trades about 0.08 of its potential returns per unit of risk. Tsogo Sun is currently generating about -0.01 per unit of risk. If you would invest 832,200 in Standard Bank Group on September 13, 2024 and sell it today you would earn a total of 97,900 from holding Standard Bank Group or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Standard Bank Group vs. Tsogo Sun
Performance |
| Timeline |
| Standard Bank Group |
| Tsogo Sun |
Standard Bank and Tsogo Sun Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Tsogo Sun
The main advantage of trading using opposite Standard Bank and Tsogo Sun positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, Tsogo Sun 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 Tsogo Sun will offset losses from the drop in Tsogo Sun's long position.| Standard Bank vs. Investec Limited NON | Standard Bank vs. Sasol Ltd Bee | Standard Bank vs. AfricaRhodium ETF | Standard Bank vs. CoreShares Preference Share |
| Tsogo Sun vs. Safari Investments RSA | Tsogo Sun vs. eMedia Holdings Limited | Tsogo Sun vs. African Media Entertainment | Tsogo Sun vs. Reinet Investments SCA |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Portfolio Backtesting Avoid under-diversification and over-optimization by backtesting your portfolios | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. |