Correlation Between Federal Bank and Sintex Plastics

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Can any of the company-specific risk be diversified away by investing in both Federal Bank and Sintex Plastics 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 Federal Bank and Sintex Plastics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between The Federal Bank and Sintex Plastics Technology, you can compare the effects of market volatilities on Federal Bank and Sintex Plastics 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 Sintex Plastics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Federal Bank and Sintex Plastics.

Diversification Opportunities for Federal Bank and Sintex Plastics

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Federal and Sintex is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding The Federal Bank and Sintex Plastics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sintex Plastics Tech 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 Sintex Plastics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sintex Plastics Tech has no effect on the direction of Federal Bank i.e., Federal Bank and Sintex Plastics go up and down completely randomly.

Pair Corralation between Federal Bank and Sintex Plastics

If you would invest  20,070  in The Federal Bank on August 30, 2024 and sell it today you would earn a total of  1,218  from holding The Federal Bank or generate 6.07% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

The Federal Bank  vs.  Sintex Plastics Technology

 Performance 
       Timeline  
Federal Bank 

Risk-Adjusted Performance

6 of 100

 
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Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in The Federal Bank are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Federal Bank may actually be approaching a critical reversion point that can send shares even higher in December 2024.
Sintex Plastics Tech 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sintex Plastics Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Sintex Plastics is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Federal Bank and Sintex Plastics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Federal Bank and Sintex Plastics

The main advantage of trading using opposite Federal Bank and Sintex Plastics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Federal Bank position performs unexpectedly, Sintex Plastics 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 Sintex Plastics will offset losses from the drop in Sintex Plastics' long position.
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The idea behind The Federal Bank and Sintex Plastics Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.

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