Correlation Between Kotak Mahindra and City Union
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By analyzing existing cross correlation between Kotak Mahindra Bank and City Union Bank, you can compare the effects of market volatilities on Kotak Mahindra and City Union 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 Kotak Mahindra with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and City Union.
Diversification Opportunities for Kotak Mahindra and City Union
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Kotak and City is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank and Kotak Mahindra 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 Kotak Mahindra Bank are associated (or correlated) with City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and City Union go up and down completely randomly.
Pair Corralation between Kotak Mahindra and City Union
Assuming the 90 days trading horizon Kotak Mahindra is expected to generate 8.06 times less return on investment than City Union. But when comparing it to its historical volatility, Kotak Mahindra Bank is 1.47 times less risky than City Union. It trades about 0.01 of its potential returns per unit of risk. City Union Bank is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 12,685 in City Union Bank on August 24, 2024 and sell it today you would earn a total of 4,495 from holding City Union Bank or generate 35.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.51% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. City Union Bank
Performance |
| Timeline |
| Kotak Mahindra Bank |
| City Union Bank |
Kotak Mahindra and City Union Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and City Union
The main advantage of trading using opposite Kotak Mahindra and City Union positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, City Union 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 City Union will offset losses from the drop in City Union's long position.| Kotak Mahindra vs. MRF Limited | Kotak Mahindra vs. Honeywell Automation India | Kotak Mahindra vs. Divis Laboratories Limited | Kotak Mahindra vs. Indo Borax Chemicals |
| City Union vs. HT Media Limited | City Union vs. Apollo Sindoori Hotels | City Union vs. Advani Hotels Resorts | City Union vs. Chalet Hotels 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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