Correlation Between STANDARD CHARTERED and ACCESS BANK

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

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

Diversification Opportunities for STANDARD CHARTERED and ACCESS BANK

-0.24

Correlation Coefficient

STANDARD CHARTERED  ACCESS BANK

Very good diversification

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

Pair Corralation between STANDARD CHARTERED and ACCESS BANK

Assuming the 90 days trading horizon STANDARD CHARTERED BANK is expected to generate 0.75 times more return on investment than ACCESS BANK. However, STANDARD CHARTERED BANK is 1.33 times less risky than ACCESS BANK. It trades about 0.16 of its potential returns per unit of risk. ACCESS BANK GHANA is currently generating about 0.0 per unit of risk. 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

STANDARD CHARTERED BANK  vs.  ACCESS BANK GHANA

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.

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.

Pair Trading with STANDARD CHARTERED and ACCESS BANK

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

The idea behind STANDARD CHARTERED BANK and ACCESS BANK GHANA 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.