Correlation Between ACCESS BANK and STANDARD CHARTERED

Can any of the company-specific risk be diversified away by investing in both ACCESS BANK and STANDARD CHARTERED 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 ACCESS BANK and STANDARD CHARTERED into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between ACCESS BANK GHANA and STANDARD CHARTERED BANK, you can compare the effects of market volatilities on ACCESS BANK and STANDARD CHARTERED 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 ACCESS BANK with a short position of STANDARD CHARTERED. Check out your portfolio center. Please also check ongoing floating volatility patterns of ACCESS BANK and STANDARD CHARTERED.

Diversification Opportunities for ACCESS BANK and STANDARD CHARTERED

-0.24

Correlation Coefficient

ACCESS BANK  STANDARD CHARTERED

Very good diversification

The 3 months correlation between ACCESS and STANDARD is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding ACCESS BANK GHANA and STANDARD CHARTERED BANK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STANDARD CHARTERED BANK and ACCESS 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 ACCESS BANK GHANA are associated (or correlated) with STANDARD CHARTERED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STANDARD CHARTERED BANK has no effect on the direction of ACCESS BANK i.e., ACCESS BANK and STANDARD CHARTERED go up and down completely randomly.

Pair Corralation between ACCESS BANK and STANDARD CHARTERED

Assuming the 90 days trading horizon ACCESS BANK GHANA is expected to under-perform the STANDARD CHARTERED. In addition to that, ACCESS BANK is 1.33 times more volatile than STANDARD CHARTERED BANK. It trades about 0.0 of its total potential returns per unit of risk. STANDARD CHARTERED BANK is currently generating about 0.16 per unit of volatility. If you would invest  2,010  in STANDARD CHARTERED BANK on September 12, 2024 and sell it today you would earn a total of  290.00  from holding STANDARD CHARTERED BANK or generate 14.43% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

ACCESS BANK GHANA  vs.  STANDARD CHARTERED BANK

ACCESS BANK GHANA

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ACCESS BANK GHANA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, ACCESS BANK is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

STANDARD CHARTERED BANK

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in STANDARD CHARTERED BANK are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, STANDARD CHARTERED exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with ACCESS BANK and STANDARD CHARTERED

The main advantage of trading using opposite ACCESS BANK and STANDARD CHARTERED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ACCESS BANK position performs unexpectedly, STANDARD CHARTERED 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 CHARTERED will offset losses from the drop in STANDARD CHARTERED's long position.

The idea behind ACCESS BANK GHANA and STANDARD CHARTERED BANK 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.

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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..