Correlation Between Middlefield Banc and Standard Bank
Can any of the company-specific risk be diversified away by investing in both Middlefield Banc and Standard Bank 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 Middlefield Banc and Standard Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Middlefield Banc and Standard Bank Group, you can compare the effects of market volatilities on Middlefield Banc and Standard 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 Middlefield Banc with a short position of Standard Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Middlefield Banc and Standard Bank.
Diversification Opportunities for Middlefield Banc and Standard Bank
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Middlefield and Standard is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Middlefield Banc and Standard Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standard Bank Group and Middlefield Banc 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 Middlefield Banc are associated (or correlated) with Standard Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standard Bank Group has no effect on the direction of Middlefield Banc i.e., Middlefield Banc and Standard Bank go up and down completely randomly.
Pair Corralation between Middlefield Banc and Standard Bank
Given the investment horizon of 90 days Middlefield Banc is expected to generate 4.2 times less return on investment than Standard Bank. In addition to that, Middlefield Banc is 1.28 times more volatile than Standard Bank Group. It trades about 0.01 of its total potential returns per unit of risk. Standard Bank Group is currently generating about 0.04 per unit of volatility. If you would invest 748.00 in Standard Bank Group on January 19, 2024 and sell it today you would earn a total of 122.00 from holding Standard Bank Group or generate 16.31% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Middlefield Banc vs. Standard Bank Group
Performance |
Timeline |
Middlefield Banc |
Standard Bank Group |
Middlefield Banc and Standard Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Middlefield Banc and Standard Bank
The main advantage of trading using opposite Middlefield Banc and Standard Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Middlefield Banc position performs unexpectedly, Standard 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 Standard Bank will offset losses from the drop in Standard Bank's long position.Middlefield Banc vs. Cullman Bancorp | Middlefield Banc vs. HMN Financial | Middlefield Banc vs. Home Federal Bancorp | Middlefield Banc vs. First Northwest Bancorp |
Standard Bank vs. Bank Central Asia | Standard Bank vs. Nedbank Group | Standard Bank vs. Kasikornbank Public Co | Standard Bank vs. KBC Groep NV |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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