Correlation Between Federal Bank and Embassy Office
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By analyzing existing cross correlation between The Federal Bank and Embassy Office Parks, you can compare the effects of market volatilities on Federal Bank and Embassy Office 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 Embassy Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and Embassy Office.
Diversification Opportunities for Federal Bank and Embassy Office
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Federal and Embassy is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank and Embassy Office Parks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Embassy Office Parks 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 Embassy Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Embassy Office Parks has no effect on the direction of Federal Bank i.e., Federal Bank and Embassy Office go up and down completely randomly.
Pair Corralation between Federal Bank and Embassy Office
Assuming the 90 days trading horizon The Federal Bank is expected to generate 1.32 times more return on investment than Embassy Office. However, Federal Bank is 1.32 times more volatile than Embassy Office Parks. It trades about 0.06 of its potential returns per unit of risk. Embassy Office Parks is currently generating about 0.05 per unit of risk. If you would invest 13,162 in The Federal Bank on October 25, 2024 and sell it today you would earn a total of 5,913 from holding The Federal Bank or generate 44.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.6% |
| Values | Daily Returns |
The Federal Bank vs. Embassy Office Parks
Performance |
| Timeline |
| Federal Bank |
| Embassy Office Parks |
Federal Bank and Embassy Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Bank and Embassy Office
The main advantage of trading using opposite Federal Bank and Embassy Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Bank position performs unexpectedly, Embassy Office 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 Embassy Office will offset losses from the drop in Embassy Office's long position.| Federal Bank vs. TVS Electronics Limited | Federal Bank vs. Reliance Communications Limited | Federal Bank vs. Hindustan Construction | Federal Bank vs. BF Utilities Limited |
| Embassy Office vs. Reliance Industries Limited | Embassy Office vs. Life Insurance | Embassy Office vs. Indian Oil | Embassy Office vs. Oil Natural Gas |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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