Correlation Between Gujarat Lease and CSB Bank
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By analyzing existing cross correlation between Gujarat Lease Financing and CSB Bank Limited, you can compare the effects of market volatilities on Gujarat Lease and CSB Bank 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 Gujarat Lease with a short position of CSB Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gujarat Lease and CSB Bank.
Diversification Opportunities for Gujarat Lease and CSB Bank
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Gujarat and CSB is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Lease Financing and CSB Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CSB Bank Limited and Gujarat Lease 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 Gujarat Lease Financing are associated (or correlated) with CSB Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CSB Bank Limited has no effect on the direction of Gujarat Lease i.e., Gujarat Lease and CSB Bank go up and down completely randomly.
Pair Corralation between Gujarat Lease and CSB Bank
Assuming the 90 days trading horizon Gujarat Lease Financing is expected to under-perform the CSB Bank. But the stock apears to be less risky and, when comparing its historical volatility, Gujarat Lease Financing is 1.28 times less risky than CSB Bank. The stock trades about -0.23 of its potential returns per unit of risk. The CSB Bank Limited is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 32,170 in CSB Bank Limited on October 12, 2024 and sell it today you would lose (1,735) from holding CSB Bank Limited or give up 5.39% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Gujarat Lease Financing vs. CSB Bank Limited
Performance |
| Timeline |
| Gujarat Lease Financing |
| CSB Bank Limited |
Gujarat Lease and CSB Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gujarat Lease and CSB Bank
The main advantage of trading using opposite Gujarat Lease and CSB Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gujarat Lease position performs unexpectedly, CSB Bank 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 CSB Bank will offset losses from the drop in CSB Bank's long position.| Gujarat Lease vs. Hilton Metal Forging | Gujarat Lease vs. LLOYDS METALS AND | Gujarat Lease vs. Alkali Metals Limited | Gujarat Lease vs. Computer Age Management |
| CSB Bank vs. Varun Beverages Limited | CSB Bank vs. Sapphire Foods India | CSB Bank vs. DMCC SPECIALITY CHEMICALS | CSB Bank vs. Gujarat Lease Financing |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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