Correlation Between STANDARD BANK and NBS BANK
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By analyzing existing cross correlation between STANDARD BANK LIMITED and NBS BANK LIMITED, you can compare the effects of market volatilities on STANDARD BANK and NBS 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 NBS BANK. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD BANK and NBS BANK.
Diversification Opportunities for STANDARD BANK and NBS BANK
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STANDARD and NBS is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD BANK LIMITED and NBS BANK LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NBS BANK LIMITED 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 LIMITED are associated (or correlated) with NBS BANK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NBS BANK LIMITED has no effect on the direction of STANDARD BANK i.e., STANDARD BANK and NBS BANK go up and down completely randomly.
Pair Corralation between STANDARD BANK and NBS BANK
Assuming the 90 days trading horizon STANDARD BANK LIMITED is expected to generate 0.67 times more return on investment than NBS BANK. However, STANDARD BANK LIMITED is 1.49 times less risky than NBS BANK. It trades about 0.18 of its potential returns per unit of risk. NBS BANK LIMITED is currently generating about 0.08 per unit of risk. If you would invest 230,003 in STANDARD BANK LIMITED on September 2, 2024 and sell it today you would earn a total of 370,006 from holding STANDARD BANK LIMITED or generate 160.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STANDARD BANK LIMITED vs. NBS BANK LIMITED
Performance |
| Timeline |
| STANDARD BANK LIMITED |
| NBS BANK LIMITED |
STANDARD BANK and NBS BANK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STANDARD BANK and NBS BANK
The main advantage of trading using opposite STANDARD BANK and NBS BANK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STANDARD BANK position performs unexpectedly, NBS 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 NBS BANK will offset losses from the drop in NBS BANK's long position.| STANDARD BANK vs. BLANTYRE HOTELS LIMITED | STANDARD BANK vs. NBS BANK LIMITED | STANDARD BANK vs. FDH BANK PLC | STANDARD BANK vs. MALAWI PROPERTY INVESTMENT |
| NBS BANK vs. MALAWI PROPERTY INVESTMENT | NBS BANK vs. STANDARD BANK LIMITED | NBS BANK vs. SUNBIRD HOTELS TOURISM | NBS BANK vs. FDH BANK PLC |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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