Correlation Between ILFS Investment and State Bank
Can any of the company-specific risk be diversified away by investing in both ILFS Investment 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 ILFS Investment and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ILFS Investment Managers and State Bank of, you can compare the effects of market volatilities on ILFS Investment 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 ILFS Investment with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and State Bank.
Diversification Opportunities for ILFS Investment and State Bank
0.83 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between ILFS and State is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and ILFS Investment 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 ILFS Investment Managers 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 ILFS Investment i.e., ILFS Investment and State Bank go up and down completely randomly.
Pair Corralation between ILFS Investment and State Bank
Assuming the 90 days trading horizon ILFS Investment Managers is expected to generate 2.01 times more return on investment than State Bank. However, ILFS Investment is 2.01 times more volatile than State Bank of. It trades about 0.06 of its potential returns per unit of risk. State Bank of is currently generating about 0.05 per unit of risk. If you would invest 593.00 in ILFS Investment Managers on October 25, 2024 and sell it today you would earn a total of 505.00 from holding ILFS Investment Managers or generate 85.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.59% |
| Values | Daily Returns |
ILFS Investment Managers vs. State Bank of
Performance |
| Timeline |
| ILFS Investment Managers |
| State Bank |
ILFS Investment and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ILFS Investment and State Bank
The main advantage of trading using opposite ILFS Investment and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ILFS Investment 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.| ILFS Investment vs. Nalwa Sons Investments | ILFS Investment vs. Kalyani Investment | ILFS Investment vs. Pilani Investment and | ILFS Investment vs. Kingfa Science Technology |
| State Bank vs. JSW Steel Limited | State Bank vs. Sunflag Iron And | State Bank vs. SAL Steel Limited | State Bank vs. Visa Steel Limited |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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