Correlation Between Kotak Mahindra and SBI Mutual
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By analyzing existing cross correlation between Kotak Mahindra Mutual and SBI Mutual Fund, you can compare the effects of market volatilities on Kotak Mahindra and SBI Mutual 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 SBI Mutual. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and SBI Mutual.
Diversification Opportunities for Kotak Mahindra and SBI Mutual
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kotak and SBI is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Mutual and SBI Mutual Fund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Mutual Fund 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 Mutual are associated (or correlated) with SBI Mutual. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Mutual Fund has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and SBI Mutual go up and down completely randomly.
Pair Corralation between Kotak Mahindra and SBI Mutual
Assuming the 90 days trading horizon Kotak Mahindra Mutual is expected to generate 1.1 times more return on investment than SBI Mutual. However, Kotak Mahindra is 1.1 times more volatile than SBI Mutual Fund. It trades about 0.1 of its potential returns per unit of risk. SBI Mutual Fund is currently generating about 0.05 per unit of risk. If you would invest 52,534 in Kotak Mahindra Mutual on September 4, 2024 and sell it today you would earn a total of 1,052 from holding Kotak Mahindra Mutual or generate 2.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Kotak Mahindra Mutual vs. SBI Mutual Fund
Performance |
| Timeline |
| Kotak Mahindra Mutual |
| SBI Mutual Fund |
Kotak Mahindra and SBI Mutual Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and SBI Mutual
The main advantage of trading using opposite Kotak Mahindra and SBI Mutual positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, SBI Mutual 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 SBI Mutual will offset losses from the drop in SBI Mutual's long position.The idea behind Kotak Mahindra Mutual and SBI Mutual Fund pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SBI Mutual vs. Kotak Mahindra Mutual | SBI Mutual vs. HDFC Nifty Smallcap | SBI Mutual vs. Icici Prudential Nifty |
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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