Correlation Between Delhi Bank and CNB
Can any of the company-specific risk be diversified away by investing in both Delhi Bank and CNB 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 Delhi Bank and CNB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Delhi Bank Corp and CNB Corporation, you can compare the effects of market volatilities on Delhi Bank and CNB 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 Delhi Bank with a short position of CNB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Delhi Bank and CNB.
Diversification Opportunities for Delhi Bank and CNB
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Delhi and CNB is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Delhi Bank Corp and CNB Corp. in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CNB Corporation and Delhi 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 Delhi Bank Corp are associated (or correlated) with CNB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CNB Corporation has no effect on the direction of Delhi Bank i.e., Delhi Bank and CNB go up and down completely randomly.
Pair Corralation between Delhi Bank and CNB
Given the investment horizon of 90 days Delhi Bank is expected to generate 8.71 times less return on investment than CNB. But when comparing it to its historical volatility, Delhi Bank Corp is 3.17 times less risky than CNB. It trades about 0.01 of its potential returns per unit of risk. CNB Corporation is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 1,903 in CNB Corporation on August 25, 2024 and sell it today you would lose (103.00) from holding CNB Corporation or give up 5.41% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.91% |
| Values | Daily Returns |
Delhi Bank Corp vs. CNB Corp.
Performance |
| Timeline |
| Delhi Bank Corp |
| CNB Corporation |
Delhi Bank and CNB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Delhi Bank and CNB
The main advantage of trading using opposite Delhi Bank and CNB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Delhi Bank position performs unexpectedly, CNB 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 CNB will offset losses from the drop in CNB's long position.| Delhi Bank vs. Standard Bank Group | Delhi Bank vs. PSB Holdings | Delhi Bank vs. United Overseas Bank | Delhi Bank vs. Turkiye Garanti Bankasi |
| CNB vs. Standard Bank Group | CNB vs. PSB Holdings | CNB vs. United Overseas Bank | CNB vs. Turkiye Garanti Bankasi |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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