Correlation Between STANDARD BANK and SUNBIRD HOTELS
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By analyzing existing cross correlation between STANDARD BANK LIMITED and SUNBIRD HOTELS TOURISM, you can compare the effects of market volatilities on STANDARD BANK and SUNBIRD HOTELS 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 SUNBIRD HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of STANDARD BANK and SUNBIRD HOTELS.
Diversification Opportunities for STANDARD BANK and SUNBIRD HOTELS
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between STANDARD and SUNBIRD is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding STANDARD BANK LIMITED and SUNBIRD HOTELS TOURISM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNBIRD HOTELS TOURISM 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 SUNBIRD HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNBIRD HOTELS TOURISM has no effect on the direction of STANDARD BANK i.e., STANDARD BANK and SUNBIRD HOTELS go up and down completely randomly.
Pair Corralation between STANDARD BANK and SUNBIRD HOTELS
Assuming the 90 days trading horizon STANDARD BANK LIMITED is expected to generate 0.84 times more return on investment than SUNBIRD HOTELS. However, STANDARD BANK LIMITED is 1.19 times less risky than SUNBIRD HOTELS. It trades about 0.17 of its potential returns per unit of risk. SUNBIRD HOTELS TOURISM is currently generating about 0.13 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
STANDARD BANK LIMITED vs. SUNBIRD HOTELS TOURISM
Performance |
| Timeline |
| STANDARD BANK LIMITED |
| SUNBIRD HOTELS TOURISM |
STANDARD BANK and SUNBIRD HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with STANDARD BANK and SUNBIRD HOTELS
The main advantage of trading using opposite STANDARD BANK and SUNBIRD HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if STANDARD BANK position performs unexpectedly, SUNBIRD HOTELS 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 SUNBIRD HOTELS will offset losses from the drop in SUNBIRD HOTELS's long position.The idea behind STANDARD BANK LIMITED and SUNBIRD HOTELS TOURISM 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.| SUNBIRD HOTELS vs. BLANTYRE HOTELS LIMITED | SUNBIRD HOTELS vs. NATIONAL INVESTMENT TRUST | SUNBIRD HOTELS vs. MALAWI PROPERTY 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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