Correlation Between Standard Bank and Schweizerische Nationalbank
Can any of the company-specific risk be diversified away by investing in both Standard Bank and Schweizerische Nationalbank 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 Schweizerische Nationalbank 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 Schweizerische Nationalbank, you can compare the effects of market volatilities on Standard Bank and Schweizerische Nationalbank 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 Schweizerische Nationalbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Standard Bank and Schweizerische Nationalbank.
Diversification Opportunities for Standard Bank and Schweizerische Nationalbank
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Standard and Schweizerische is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Standard Bank Group and Schweizerische Nationalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweizerische Nationalbank 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 Schweizerische Nationalbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweizerische Nationalbank has no effect on the direction of Standard Bank i.e., Standard Bank and Schweizerische Nationalbank go up and down completely randomly.
Pair Corralation between Standard Bank and Schweizerische Nationalbank
Assuming the 90 days horizon Standard Bank Group is expected to generate 0.98 times more return on investment than Schweizerische Nationalbank. However, Standard Bank Group is 1.02 times less risky than Schweizerische Nationalbank. It trades about 0.04 of its potential returns per unit of risk. Schweizerische Nationalbank is currently generating about -0.09 per unit of risk. If you would invest 1,314 in Standard Bank Group on August 25, 2024 and sell it today you would earn a total of 42.00 from holding Standard Bank Group or generate 3.2% 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. Schweizerische Nationalbank
Performance |
| Timeline |
| Standard Bank Group |
| Schweizerische Nationalbank |
Standard Bank and Schweizerische Nationalbank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Standard Bank and Schweizerische Nationalbank
The main advantage of trading using opposite Standard Bank and Schweizerische Nationalbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Standard Bank position performs unexpectedly, Schweizerische Nationalbank 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 Schweizerische Nationalbank will offset losses from the drop in Schweizerische Nationalbank'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 |
| Schweizerische Nationalbank vs. Israel Discount Bank | Schweizerische Nationalbank vs. Baraboo Bancorporation | Schweizerische Nationalbank vs. Danske Bank AS | Schweizerische Nationalbank vs. Jyske Bank AS |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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