Correlation Between State Bank and DBS Group
Can any of the company-specific risk be diversified away by investing in both State Bank and DBS Group 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 State Bank and DBS Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and DBS Group Holdings, you can compare the effects of market volatilities on State Bank and DBS Group 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 State Bank with a short position of DBS Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and DBS Group.
Diversification Opportunities for State Bank and DBS Group
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and DBS is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and DBS Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DBS Group Holdings and State 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 State Bank of are associated (or correlated) with DBS Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DBS Group Holdings has no effect on the direction of State Bank i.e., State Bank and DBS Group go up and down completely randomly.
Pair Corralation between State Bank and DBS Group
Assuming the 90 days horizon State Bank of is expected to generate 1.22 times more return on investment than DBS Group. However, State Bank is 1.22 times more volatile than DBS Group Holdings. It trades about 0.19 of its potential returns per unit of risk. DBS Group Holdings is currently generating about 0.19 per unit of risk. If you would invest 8,500 in State Bank of on August 29, 2024 and sell it today you would earn a total of 900.00 from holding State Bank of or generate 10.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
State Bank of vs. DBS Group Holdings
Performance |
| Timeline |
| State Bank |
| DBS Group Holdings |
State Bank and DBS Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and DBS Group
The main advantage of trading using opposite State Bank and DBS Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, DBS Group 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 DBS Group will offset losses from the drop in DBS Group's long position.| State Bank vs. GEELY AUTOMOBILE | State Bank vs. Global Ship Lease | State Bank vs. Sporttotal AG | State Bank vs. CARSALESCOM |
| DBS Group vs. Cleanaway Waste Management | DBS Group vs. Pebblebrook Hotel Trust | DBS Group vs. COFCO Joycome Foods | DBS Group vs. Lifeway Foods |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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