Correlation Between Credit Acceptance and HDFC Bank
Can any of the company-specific risk be diversified away by investing in both Credit Acceptance and HDFC 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 Credit Acceptance and HDFC Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Credit Acceptance and HDFC Bank Limited, you can compare the effects of market volatilities on Credit Acceptance and HDFC 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 Credit Acceptance with a short position of HDFC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Credit Acceptance and HDFC Bank.
Diversification Opportunities for Credit Acceptance and HDFC Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Credit and HDFC is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Credit Acceptance and HDFC Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HDFC Bank Limited and Credit Acceptance 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 Credit Acceptance are associated (or correlated) with HDFC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HDFC Bank Limited has no effect on the direction of Credit Acceptance i.e., Credit Acceptance and HDFC Bank go up and down completely randomly.
Pair Corralation between Credit Acceptance and HDFC Bank
Assuming the 90 days trading horizon Credit Acceptance is expected to generate 0.46 times more return on investment than HDFC Bank. However, Credit Acceptance is 2.17 times less risky than HDFC Bank. It trades about 0.07 of its potential returns per unit of risk. HDFC Bank Limited is currently generating about 0.01 per unit of risk. If you would invest 21,940 in Credit Acceptance on November 28, 2024 and sell it today you would earn a total of 10,560 from holding Credit Acceptance or generate 48.13% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Credit Acceptance vs. HDFC Bank Limited
Performance |
| Timeline |
| Credit Acceptance |
| HDFC Bank Limited |
Credit Acceptance and HDFC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Credit Acceptance and HDFC Bank
The main advantage of trading using opposite Credit Acceptance and HDFC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Credit Acceptance position performs unexpectedly, HDFC 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 HDFC Bank will offset losses from the drop in HDFC Bank's long position.| Credit Acceptance vs. United Rentals | Credit Acceptance vs. Verizon Communications | Credit Acceptance vs. Brpr Corporate Offices | Credit Acceptance vs. Charter Communications |
| HDFC Bank vs. Global X Funds | HDFC Bank vs. Telecomunicaes Brasileiras SA | HDFC Bank vs. GP Investments | HDFC Bank vs. Guidewire Software, |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
Other Complementary Tools
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stocks Directory Find actively traded stocks across global markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |