Correlation Between Dow Jones and SBI Cards
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By analyzing existing cross correlation between Dow Jones Industrial and SBI Cards and, you can compare the effects of market volatilities on Dow Jones and SBI Cards 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 Dow Jones with a short position of SBI Cards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dow Jones and SBI Cards.
Diversification Opportunities for Dow Jones and SBI Cards
Significant diversification
The 3 months correlation between Dow and SBI is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Dow Jones Industrial and SBI Cards and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Cards and Dow Jones 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 Dow Jones Industrial are associated (or correlated) with SBI Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Cards has no effect on the direction of Dow Jones i.e., Dow Jones and SBI Cards go up and down completely randomly.
Pair Corralation between Dow Jones and SBI Cards
Assuming the 90 days trading horizon Dow Jones is expected to generate 6.52 times less return on investment than SBI Cards. But when comparing it to its historical volatility, Dow Jones Industrial is 2.57 times less risky than SBI Cards. It trades about 0.1 of its potential returns per unit of risk. SBI Cards and is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 69,130 in SBI Cards and on October 23, 2024 and sell it today you would earn a total of 7,020 from holding SBI Cards and or generate 10.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Dow Jones Industrial vs. SBI Cards and
Performance |
| Timeline |
Dow Jones and SBI Cards Volatility Contrast
Predicted Return Density |
| Returns |
Dow Jones Industrial
Pair trading matchups for Dow Jones
SBI Cards and
Pair trading matchups for SBI Cards
Pair Trading with Dow Jones and SBI Cards
The main advantage of trading using opposite Dow Jones and SBI Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dow Jones position performs unexpectedly, SBI Cards 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 SBI Cards will offset losses from the drop in SBI Cards' long position.| Dow Jones vs. Grupo Televisa SAB | Dow Jones vs. NiSource | Dow Jones vs. Kinetik Holdings | Dow Jones vs. Empresa Distribuidora y |
| SBI Cards vs. Spencers Retail Limited | SBI Cards vs. Credo Brands Marketing | SBI Cards vs. Future Retail Limited | SBI Cards vs. STEEL EXCHANGE INDIA |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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