Correlation Between Kotak Mahindra and RBL Bank
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By analyzing existing cross correlation between Kotak Mahindra Bank and RBL Bank Limited, you can compare the effects of market volatilities on Kotak Mahindra and RBL 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 Kotak Mahindra with a short position of RBL Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and RBL Bank.
Diversification Opportunities for Kotak Mahindra and RBL Bank
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Kotak and RBL is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and RBL Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on RBL Bank Limited 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 RBL Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of RBL Bank Limited has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and RBL Bank go up and down completely randomly.
Pair Corralation between Kotak Mahindra and RBL Bank
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 0.59 times more return on investment than RBL Bank. However, Kotak Mahindra Bank is 1.68 times less risky than RBL Bank. It trades about 0.04 of its potential returns per unit of risk. RBL Bank Limited is currently generating about -0.04 per unit of risk. If you would invest 171,251 in Kotak Mahindra Bank on November 8, 2024 and sell it today you would earn a total of 20,344 from holding Kotak Mahindra Bank or generate 11.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. RBL Bank Limited
Performance |
| Timeline |
| Kotak Mahindra Bank |
| RBL Bank Limited |
Kotak Mahindra and RBL Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and RBL Bank
The main advantage of trading using opposite Kotak Mahindra and RBL Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, RBL 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 RBL Bank will offset losses from the drop in RBL Bank's long position.| Kotak Mahindra vs. Tera Software Limited | Kotak Mahindra vs. Compucom Software Limited | Kotak Mahindra vs. Nucleus Software Exports | Kotak Mahindra vs. Vidhi Specialty Food |
| RBL Bank vs. Jayant Agro Organics | RBL Bank vs. Varun Beverages Limited | RBL Bank vs. Apex Frozen Foods | RBL Bank vs. Vinati Organics 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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