Correlation Between Standard Bank and CoastalSouth Bancshares
Can any of the company-specific risk be diversified away by investing in both Standard Bank and CoastalSouth Bancshares 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 CoastalSouth Bancshares 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 CoastalSouth Bancshares, you can compare the effects of market volatilities on Standard Bank and CoastalSouth Bancshares 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 CoastalSouth Bancshares. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and CoastalSouth Bancshares.
Diversification Opportunities for Standard Bank and CoastalSouth Bancshares
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Standard and CoastalSouth is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and CoastalSouth Bancshares in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CoastalSouth Bancshares 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 CoastalSouth Bancshares. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CoastalSouth Bancshares has no effect on the direction of Standard Bank i.e., Standard Bank and CoastalSouth Bancshares go up and down completely randomly.
Pair Corralation between Standard Bank and CoastalSouth Bancshares
Assuming the 90 days horizon Standard Bank is expected to generate 1.76 times less return on investment than CoastalSouth Bancshares. In addition to that, Standard Bank is 3.02 times more volatile than CoastalSouth Bancshares. It trades about 0.04 of its total potential returns per unit of risk. CoastalSouth Bancshares is currently generating about 0.21 per unit of volatility. If you would invest 2,005 in CoastalSouth Bancshares on August 26, 2024 and sell it today you would earn a total of 45.00 from holding CoastalSouth Bancshares or generate 2.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Bank Group vs. CoastalSouth Bancshares
Performance |
| Timeline |
| Standard Bank Group |
| CoastalSouth Bancshares |
Standard Bank and CoastalSouth Bancshares Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and CoastalSouth Bancshares
The main advantage of trading using opposite Standard Bank and CoastalSouth Bancshares positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, CoastalSouth Bancshares 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 CoastalSouth Bancshares will offset losses from the drop in CoastalSouth Bancshares' long position.| Standard Bank vs. PSB Holdings | Standard Bank vs. United Overseas Bank | Standard Bank 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 CEOs Directory module to screen CEOs from public companies around the world.
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