Correlation Between Federal Bank and Computer Age
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By analyzing existing cross correlation between The Federal Bank and Computer Age Management, you can compare the effects of market volatilities on Federal Bank and Computer Age 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 Federal Bank with a short position of Computer Age. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and Computer Age.
Diversification Opportunities for Federal Bank and Computer Age
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Federal and Computer is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank and Computer Age Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Computer Age Management and Federal 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 The Federal Bank are associated (or correlated) with Computer Age. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Computer Age Management has no effect on the direction of Federal Bank i.e., Federal Bank and Computer Age go up and down completely randomly.
Pair Corralation between Federal Bank and Computer Age
Assuming the 90 days trading horizon Federal Bank is expected to generate 1.64 times less return on investment than Computer Age. But when comparing it to its historical volatility, The Federal Bank is 1.43 times less risky than Computer Age. It trades about 0.1 of its potential returns per unit of risk. Computer Age Management is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 209,707 in Computer Age Management on September 2, 2024 and sell it today you would earn a total of 283,133 from holding Computer Age Management or generate 135.01% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Federal Bank vs. Computer Age Management
Performance |
| Timeline |
| Federal Bank |
| Computer Age Management |
Federal Bank and Computer Age Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Bank and Computer Age
The main advantage of trading using opposite Federal Bank and Computer Age positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Bank position performs unexpectedly, Computer Age 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 Computer Age will offset losses from the drop in Computer Age's long position.| Federal Bank vs. Foods Inns Limited | Federal Bank vs. Dev Information Technology | Federal Bank vs. Univa Foods Limited | Federal Bank vs. Mrs Bectors Food |
| Computer Age vs. Pritish Nandy Communications | Computer Age vs. Touchwood Entertainment Limited | Computer Age vs. Network18 Media Investments | Computer Age vs. DJ Mediaprint Logistics |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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