Correlation Between Standard Bank and Delhi Bank
Can any of the company-specific risk be diversified away by investing in both Standard Bank and Delhi Bank 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 Delhi Bank 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 Delhi Bank Corp, you can compare the effects of market volatilities on Standard Bank and Delhi Bank 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 Delhi Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Delhi Bank.
Diversification Opportunities for Standard Bank and Delhi Bank
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Standard and Delhi is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and Delhi Bank Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Delhi Bank Corp 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 Delhi Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Delhi Bank Corp has no effect on the direction of Standard Bank i.e., Standard Bank and Delhi Bank go up and down completely randomly.
Pair Corralation between Standard Bank and Delhi Bank
Assuming the 90 days horizon Standard Bank Group is expected to generate 7.17 times more return on investment than Delhi Bank. However, Standard Bank is 7.17 times more volatile than Delhi Bank Corp. It trades about 0.01 of its potential returns per unit of risk. Delhi Bank Corp is currently generating about 0.0 per unit of risk. If you would invest 1,355 in Standard Bank Group on August 25, 2024 and sell it today you would earn a total of 1.00 from holding Standard Bank Group or generate 0.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Standard Bank Group vs. Delhi Bank Corp
Performance |
| Timeline |
| Standard Bank Group |
| Delhi Bank Corp |
Standard Bank and Delhi Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Delhi Bank
The main advantage of trading using opposite Standard Bank and Delhi Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, Delhi Bank 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 Delhi Bank will offset losses from the drop in Delhi Bank'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 |
| Delhi Bank vs. Standard Bank Group | Delhi Bank vs. PSB Holdings | Delhi Bank vs. United Overseas Bank | Delhi 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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