Correlation Between Induction Healthcare and State Bank
Can any of the company-specific risk be diversified away by investing in both Induction Healthcare and State 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 Induction Healthcare and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Induction Healthcare Group and State Bank of, you can compare the effects of market volatilities on Induction Healthcare and State 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 Induction Healthcare with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Induction Healthcare and State Bank.
Diversification Opportunities for Induction Healthcare and State Bank
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Induction and State is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Induction Healthcare Group and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Induction Healthcare 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 Induction Healthcare Group are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Induction Healthcare i.e., Induction Healthcare and State Bank go up and down completely randomly.
Pair Corralation between Induction Healthcare and State Bank
Assuming the 90 days trading horizon Induction Healthcare Group is expected to generate 2.0 times more return on investment than State Bank. However, Induction Healthcare is 2.0 times more volatile than State Bank of. It trades about 0.09 of its potential returns per unit of risk. State Bank of is currently generating about 0.09 per unit of risk. If you would invest 850.00 in Induction Healthcare Group on September 1, 2024 and sell it today you would earn a total of 50.00 from holding Induction Healthcare Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Induction Healthcare Group vs. State Bank of
Performance |
| Timeline |
| Induction Healthcare |
| State Bank |
Induction Healthcare and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Induction Healthcare and State Bank
The main advantage of trading using opposite Induction Healthcare and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Induction Healthcare position performs unexpectedly, State 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 State Bank will offset losses from the drop in State Bank's long position.| Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Samsung Electronics Co | Induction Healthcare vs. Hyundai Motor | Induction Healthcare vs. Toyota Motor Corp |
| State Bank vs. Medical Properties Trust | State Bank vs. Litigation Capital Management | State Bank vs. Impax Asset Management | State Bank vs. Tatton Asset Management |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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