Correlation Between Federal Bank and Prakash Steelage
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By analyzing existing cross correlation between The Federal Bank and Prakash Steelage Limited, you can compare the effects of market volatilities on Federal Bank and Prakash Steelage 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 Prakash Steelage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and Prakash Steelage.
Diversification Opportunities for Federal Bank and Prakash Steelage
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Federal and Prakash is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank and Prakash Steelage Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prakash Steelage 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 Prakash Steelage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prakash Steelage has no effect on the direction of Federal Bank i.e., Federal Bank and Prakash Steelage go up and down completely randomly.
Pair Corralation between Federal Bank and Prakash Steelage
Assuming the 90 days trading horizon The Federal Bank is expected to generate 0.7 times more return on investment than Prakash Steelage. However, The Federal Bank is 1.43 times less risky than Prakash Steelage. It trades about 0.1 of its potential returns per unit of risk. Prakash Steelage Limited is currently generating about -0.04 per unit of risk. If you would invest 18,787 in The Federal Bank on September 4, 2024 and sell it today you would earn a total of 2,121 from holding The Federal Bank or generate 11.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
The Federal Bank vs. Prakash Steelage Limited
Performance |
| Timeline |
| Federal Bank |
| Prakash Steelage |
Federal Bank and Prakash Steelage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Federal Bank and Prakash Steelage
The main advantage of trading using opposite Federal Bank and Prakash Steelage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Bank position performs unexpectedly, Prakash Steelage 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 Prakash Steelage will offset losses from the drop in Prakash Steelage's long position.| Federal Bank vs. UltraTech Cement Limited | Federal Bank vs. Nazara Technologies Limited | Federal Bank vs. TPL Plastech Limited | Federal Bank vs. Ankit Metal Power |
| Prakash Steelage vs. The Federal Bank | Prakash Steelage vs. Life Insurance | Prakash Steelage vs. Karur Vysya Bank | Prakash Steelage vs. Praxis Home Retail |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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