Correlation Between Standard Bank and Bank of Utica
Can any of the company-specific risk be diversified away by investing in both Standard Bank and Bank of Utica 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 Bank of Utica 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 Bank of Utica, you can compare the effects of market volatilities on Standard Bank and Bank of Utica 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 Bank of Utica. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Bank of Utica.
Diversification Opportunities for Standard Bank and Bank of Utica
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Standard and Bank is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and Bank of Utica in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bank of Utica 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 Bank of Utica. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bank of Utica has no effect on the direction of Standard Bank i.e., Standard Bank and Bank of Utica go up and down completely randomly.
Pair Corralation between Standard Bank and Bank of Utica
Assuming the 90 days horizon Standard Bank is expected to generate 26.21 times less return on investment than Bank of Utica. In addition to that, Standard Bank is 1.38 times more volatile than Bank of Utica. It trades about 0.01 of its total potential returns per unit of risk. Bank of Utica is currently generating about 0.34 per unit of volatility. If you would invest 45,000 in Bank of Utica on August 25, 2024 and sell it today you would earn a total of 3,800 from holding Bank of Utica or generate 8.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Bank Group vs. Bank of Utica
Performance |
| Timeline |
| Standard Bank Group |
| Bank of Utica |
Standard Bank and Bank of Utica Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Bank of Utica
The main advantage of trading using opposite Standard Bank and Bank of Utica positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, Bank of Utica 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 Bank of Utica will offset losses from the drop in Bank of Utica's long position.| Standard Bank vs. PSB Holdings | Standard Bank vs. United Overseas Bank | Standard Bank vs. Turkiye Garanti Bankasi | Standard Bank vs. Hang Seng Bank |
| Bank of Utica vs. Standard Bank Group | Bank of Utica vs. PSB Holdings | Bank of Utica vs. United Overseas Bank | Bank of Utica vs. Turkiye Garanti Bankasi |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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