Correlation Between AstraZeneca PLC and State Bank
Can any of the company-specific risk be diversified away by investing in both AstraZeneca PLC and State 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 AstraZeneca PLC and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AstraZeneca PLC and State Bank of, you can compare the effects of market volatilities on AstraZeneca PLC and State 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 AstraZeneca PLC with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AstraZeneca PLC and State Bank.
Diversification Opportunities for AstraZeneca PLC and State Bank
-0.81 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AstraZeneca and State is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding AstraZeneca PLC and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and AstraZeneca PLC 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 AstraZeneca PLC are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of AstraZeneca PLC i.e., AstraZeneca PLC and State Bank go up and down completely randomly.
Pair Corralation between AstraZeneca PLC and State Bank
Assuming the 90 days trading horizon AstraZeneca PLC is expected to generate 1.48 times more return on investment than State Bank. However, AstraZeneca PLC is 1.48 times more volatile than State Bank of. It trades about 0.17 of its potential returns per unit of risk. State Bank of is currently generating about -0.22 per unit of risk. If you would invest 1,117,840 in AstraZeneca PLC on November 28, 2024 and sell it today you would earn a total of 70,360 from holding AstraZeneca PLC or generate 6.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
AstraZeneca PLC vs. State Bank of
Performance |
| Timeline |
| AstraZeneca PLC |
| State Bank |
AstraZeneca PLC and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AstraZeneca PLC and State Bank
The main advantage of trading using opposite AstraZeneca PLC and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AstraZeneca PLC position performs unexpectedly, State 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 State Bank will offset losses from the drop in State Bank's long position.| AstraZeneca PLC vs. Atalaya Mining | AstraZeneca PLC vs. CNH Industrial NV | AstraZeneca PLC vs. Eastinco Mining Exploration | AstraZeneca PLC vs. Universal Music Group |
| State Bank vs. JD Sports Fashion | State Bank vs. Hollywood Bowl Group | State Bank vs. Centaur Media | State Bank vs. Liberty Media Corp |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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