Correlation Between KBC Ancora and Axis Bank
Can any of the company-specific risk be diversified away by investing in both KBC Ancora 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 KBC Ancora and Axis Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KBC Ancora SCA and Axis Bank Limited, you can compare the effects of market volatilities on KBC Ancora 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 KBC Ancora with a short position of Axis Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of KBC Ancora and Axis Bank.
Diversification Opportunities for KBC Ancora and Axis Bank
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between KBC and Axis is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding KBC Ancora SCA and Axis Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axis Bank Limited and KBC Ancora 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 KBC Ancora SCA 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 Limited has no effect on the direction of KBC Ancora i.e., KBC Ancora and Axis Bank go up and down completely randomly.
Pair Corralation between KBC Ancora and Axis Bank
Assuming the 90 days horizon KBC Ancora SCA is expected to generate 0.74 times more return on investment than Axis Bank. However, KBC Ancora SCA is 1.34 times less risky than Axis Bank. It trades about 0.11 of its potential returns per unit of risk. Axis Bank Limited is currently generating about -0.02 per unit of risk. If you would invest 3,649 in KBC Ancora SCA on November 3, 2024 and sell it today you would earn a total of 1,491 from holding KBC Ancora SCA or generate 40.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KBC Ancora SCA vs. Axis Bank Limited
Performance |
| Timeline |
| KBC Ancora SCA |
| Axis Bank Limited |
KBC Ancora and Axis Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KBC Ancora and Axis Bank
The main advantage of trading using opposite KBC Ancora and Axis Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KBC Ancora 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.| KBC Ancora vs. Addus HomeCare | KBC Ancora vs. MUTUIONLINE | KBC Ancora vs. KENEDIX OFFICE INV | KBC Ancora vs. Autohome ADR |
| Axis Bank vs. USU Software AG | Axis Bank vs. APPLIED MATERIALS | Axis Bank vs. FORMPIPE SOFTWARE AB | Axis Bank vs. Sumitomo Rubber Industries |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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