Correlation Between Indian Railway and SBI Cards
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By analyzing existing cross correlation between Indian Railway Finance and SBI Cards and, you can compare the effects of market volatilities on Indian Railway and SBI Cards 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 Indian Railway with a short position of SBI Cards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Indian Railway and SBI Cards.
Diversification Opportunities for Indian Railway and SBI Cards
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Indian and SBI is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Indian Railway Finance and SBI Cards and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Cards and Indian Railway 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 Indian Railway Finance are associated (or correlated) with SBI Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Cards has no effect on the direction of Indian Railway i.e., Indian Railway and SBI Cards go up and down completely randomly.
Pair Corralation between Indian Railway and SBI Cards
Assuming the 90 days trading horizon Indian Railway Finance is expected to under-perform the SBI Cards. In addition to that, Indian Railway is 2.12 times more volatile than SBI Cards and. It trades about -0.09 of its total potential returns per unit of risk. SBI Cards and is currently generating about 0.04 per unit of volatility. If you would invest 69,480 in SBI Cards and on September 2, 2024 and sell it today you would earn a total of 580.00 from holding SBI Cards and or generate 0.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.24% |
| Values | Daily Returns |
Indian Railway Finance vs. SBI Cards and
Performance |
| Timeline |
| Indian Railway Finance |
| SBI Cards |
Indian Railway and SBI Cards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Indian Railway and SBI Cards
The main advantage of trading using opposite Indian Railway and SBI Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Indian Railway position performs unexpectedly, SBI Cards 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 SBI Cards will offset losses from the drop in SBI Cards' long position.| Indian Railway vs. Agro Tech Foods | Indian Railway vs. VIP Clothing Limited | Indian Railway vs. S P Apparels | Indian Railway vs. AAA Technologies Limited |
| SBI Cards vs. Advani Hotels Resorts | SBI Cards vs. Reliance Home Finance | SBI Cards vs. Chalet Hotels Limited | SBI Cards vs. EIH Associated Hotels |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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