Correlation Between STANBIC BANK and NATION MEDIA
Can any of the company-specific risk be diversified away by investing in both STANBIC BANK and NATION MEDIA 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 STANBIC BANK and NATION MEDIA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between STANBIC BANK HOLDINGS and NATION MEDIA GROUP, you can compare the effects of market volatilities on STANBIC BANK and NATION MEDIA 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 STANBIC BANK with a short position of NATION MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANBIC BANK and NATION MEDIA.
Diversification Opportunities for STANBIC BANK and NATION MEDIA
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between STANBIC and NATION is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding STANBIC BANK HOLDINGS and NATION MEDIA GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATION MEDIA GROUP and STANBIC 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 STANBIC BANK HOLDINGS are associated (or correlated) with NATION MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATION MEDIA GROUP has no effect on the direction of STANBIC BANK i.e., STANBIC BANK and NATION MEDIA go up and down completely randomly.
Pair Corralation between STANBIC BANK and NATION MEDIA
Assuming the 90 days trading horizon STANBIC BANK HOLDINGS is expected to generate 0.27 times more return on investment than NATION MEDIA. However, STANBIC BANK HOLDINGS is 3.74 times less risky than NATION MEDIA. It trades about -0.34 of its potential returns per unit of risk. NATION MEDIA GROUP is currently generating about -0.22 per unit of risk. If you would invest 5,200 in STANBIC BANK HOLDINGS on August 30, 2024 and sell it today you would lose (328.00) from holding STANBIC BANK HOLDINGS or give up 6.31% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
STANBIC BANK HOLDINGS vs. NATION MEDIA GROUP
Performance |
| Timeline |
| STANBIC BANK HOLDINGS |
| NATION MEDIA GROUP |
STANBIC BANK and NATION MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STANBIC BANK and NATION MEDIA
The main advantage of trading using opposite STANBIC BANK and NATION MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STANBIC BANK position performs unexpectedly, NATION MEDIA 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 NATION MEDIA will offset losses from the drop in NATION MEDIA's long position.| STANBIC BANK vs. CENTUM INVESTMENT PANY | STANBIC BANK vs. BRITISH AMERICAN TOBACCO | STANBIC BANK vs. EAST AFRICAN BREWERIES | STANBIC BANK vs. QUALITY CHEMICAL INDUSTRIES |
| NATION MEDIA vs. UMEME LIMITED | NATION MEDIA vs. AIRTEL UGANDA LIMITED | NATION MEDIA vs. QUALITY CHEMICAL INDUSTRIES | NATION MEDIA vs. STANBIC BANK HOLDINGS |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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