Correlation Between Standard Bank and Banco Del
Can any of the company-specific risk be diversified away by investing in both Standard Bank and Banco Del 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 Banco Del 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 Banco del Bajo, you can compare the effects of market volatilities on Standard Bank and Banco Del 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 Banco Del. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Banco Del.
Diversification Opportunities for Standard Bank and Banco Del
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between Standard and Banco is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and Banco del Bajo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Banco del Bajo 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 Banco Del. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Banco del Bajo has no effect on the direction of Standard Bank i.e., Standard Bank and Banco Del go up and down completely randomly.
Pair Corralation between Standard Bank and Banco Del
Assuming the 90 days horizon Standard Bank Group is expected to generate 0.54 times more return on investment than Banco Del. However, Standard Bank Group is 1.86 times less risky than Banco Del. It trades about -0.06 of its potential returns per unit of risk. Banco del Bajo is currently generating about -0.34 per unit of risk. If you would invest 1,380 in Standard Bank Group on August 29, 2024 and sell it today you would lose (26.00) from holding Standard Bank Group or give up 1.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 36.36% |
| Values | Daily Returns |
Standard Bank Group vs. Banco del Bajo
Performance |
| Timeline |
| Standard Bank Group |
| Banco del Bajo |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Standard Bank and Banco Del Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Banco Del
The main advantage of trading using opposite Standard Bank and Banco Del positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, Banco Del 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 Banco Del will offset losses from the drop in Banco Del's long position.| Standard Bank vs. Bank Central Asia | Standard Bank vs. Nedbank Group | Standard Bank vs. Kasikornbank Public Co | Standard Bank vs. KBC Groep NV |
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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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