Correlation Between Karur Vysya and Gujarat Lease
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By analyzing existing cross correlation between Karur Vysya Bank and Gujarat Lease Financing, you can compare the effects of market volatilities on Karur Vysya and Gujarat Lease 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 Karur Vysya with a short position of Gujarat Lease. Check out your portfolio center. Please also check ongoing floating volatility patterns of Karur Vysya and Gujarat Lease.
Diversification Opportunities for Karur Vysya and Gujarat Lease
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Karur and Gujarat is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Karur Vysya Bank and Gujarat Lease Financing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gujarat Lease Financing and Karur Vysya 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 Karur Vysya Bank are associated (or correlated) with Gujarat Lease. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gujarat Lease Financing has no effect on the direction of Karur Vysya i.e., Karur Vysya and Gujarat Lease go up and down completely randomly.
Pair Corralation between Karur Vysya and Gujarat Lease
Assuming the 90 days trading horizon Karur Vysya is expected to generate 3.0 times less return on investment than Gujarat Lease. But when comparing it to its historical volatility, Karur Vysya Bank is 1.35 times less risky than Gujarat Lease. It trades about 0.13 of its potential returns per unit of risk. Gujarat Lease Financing is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 714.00 in Gujarat Lease Financing on September 12, 2024 and sell it today you would earn a total of 128.00 from holding Gujarat Lease Financing or generate 17.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Karur Vysya Bank vs. Gujarat Lease Financing
Performance |
| Timeline |
| Karur Vysya Bank |
| Gujarat Lease Financing |
Karur Vysya and Gujarat Lease Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Karur Vysya and Gujarat Lease
The main advantage of trading using opposite Karur Vysya and Gujarat Lease positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Karur Vysya position performs unexpectedly, Gujarat Lease 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 Gujarat Lease will offset losses from the drop in Gujarat Lease's long position.| Karur Vysya vs. Yes Bank Limited | Karur Vysya vs. Indian Oil | Karur Vysya vs. Indo Borax Chemicals | Karur Vysya vs. Kingfa Science Technology |
| Gujarat Lease vs. Shyam Metalics and | Gujarat Lease vs. Sintex Plastics Technology | Gujarat Lease vs. LLOYDS METALS AND | Gujarat Lease vs. Embassy Office Parks |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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