Correlation Between STANDARD BANK and NATIONAL INVESTMENT
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By analyzing existing cross correlation between STANDARD BANK LIMITED and NATIONAL INVESTMENT TRUST, you can compare the effects of market volatilities on STANDARD BANK and NATIONAL INVESTMENT 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 NATIONAL INVESTMENT. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD BANK and NATIONAL INVESTMENT.
Diversification Opportunities for STANDARD BANK and NATIONAL INVESTMENT
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between STANDARD and NATIONAL is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD BANK LIMITED and NATIONAL INVESTMENT TRUST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NATIONAL INVESTMENT TRUST 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 NATIONAL INVESTMENT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NATIONAL INVESTMENT TRUST has no effect on the direction of STANDARD BANK i.e., STANDARD BANK and NATIONAL INVESTMENT go up and down completely randomly.
Pair Corralation between STANDARD BANK and NATIONAL INVESTMENT
Assuming the 90 days trading horizon STANDARD BANK LIMITED is expected to generate 0.93 times more return on investment than NATIONAL INVESTMENT. However, STANDARD BANK LIMITED is 1.07 times less risky than NATIONAL INVESTMENT. It trades about 0.17 of its potential returns per unit of risk. NATIONAL INVESTMENT TRUST is currently generating about 0.14 per unit of risk. If you would invest 220,000 in STANDARD BANK LIMITED on November 2, 2024 and sell it today you would earn a total of 470,002 from holding STANDARD BANK LIMITED or generate 213.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
STANDARD BANK LIMITED vs. NATIONAL INVESTMENT TRUST
Performance |
| Timeline |
| STANDARD BANK LIMITED |
| NATIONAL INVESTMENT TRUST |
STANDARD BANK and NATIONAL INVESTMENT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STANDARD BANK and NATIONAL INVESTMENT
The main advantage of trading using opposite STANDARD BANK and NATIONAL INVESTMENT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STANDARD BANK position performs unexpectedly, NATIONAL INVESTMENT 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 NATIONAL INVESTMENT will offset losses from the drop in NATIONAL INVESTMENT's long position.The idea behind STANDARD BANK LIMITED and NATIONAL INVESTMENT TRUST pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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