Correlation Between Guaranty Trust and Axis Bank
Can any of the company-specific risk be diversified away by investing in both Guaranty Trust and Axis Bank 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 Guaranty Trust and Axis Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Guaranty Trust Holding and Axis Bank Ltd, you can compare the effects of market volatilities on Guaranty Trust and Axis 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 Guaranty Trust with a short position of Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Guaranty Trust and Axis Bank.
Diversification Opportunities for Guaranty Trust and Axis Bank
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Guaranty and Axis is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Guaranty Trust Holding and Axis Bank Ltd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank and Guaranty Trust 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 Guaranty Trust Holding are associated (or correlated) with Axis Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axis Bank has no effect on the direction of Guaranty Trust i.e., Guaranty Trust and Axis Bank go up and down completely randomly.
Pair Corralation between Guaranty Trust and Axis Bank
Assuming the 90 days trading horizon Guaranty Trust Holding is expected to generate 2.06 times more return on investment than Axis Bank. However, Guaranty Trust is 2.06 times more volatile than Axis Bank Ltd. It trades about 0.05 of its potential returns per unit of risk. Axis Bank Ltd is currently generating about -0.12 per unit of risk. If you would invest 182.00 in Guaranty Trust Holding on August 28, 2024 and sell it today you would earn a total of 3.00 from holding Guaranty Trust Holding or generate 1.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Guaranty Trust Holding vs. Axis Bank Ltd
Performance |
| Timeline |
| Guaranty Trust Holding |
| Axis Bank |
Guaranty Trust and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Guaranty Trust and Axis Bank
The main advantage of trading using opposite Guaranty Trust and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Guaranty Trust position performs unexpectedly, Axis 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 Axis Bank will offset losses from the drop in Axis Bank's long position.| Guaranty Trust vs. Toyota Motor Corp | Guaranty Trust vs. SoftBank Group Corp | Guaranty Trust vs. Fannie Mae | Guaranty Trust vs. State Bank of |
| Axis Bank vs. SupplyMe Capital PLC | Axis Bank vs. Lloyds Banking Group | Axis Bank vs. 88 Energy | Axis Bank vs. Vodafone Group PLC |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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