Correlation Between Punjab National and Sukhjit Starch
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By analyzing existing cross correlation between Punjab National Bank and Sukhjit Starch Chemicals, you can compare the effects of market volatilities on Punjab National and Sukhjit Starch 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 Punjab National with a short position of Sukhjit Starch. Check out your portfolio center. Please also check ongoing floating volatility patterns of Punjab National and Sukhjit Starch.
Diversification Opportunities for Punjab National and Sukhjit Starch
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Punjab and Sukhjit is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Punjab National Bank and Sukhjit Starch Chemicals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sukhjit Starch Chemicals and Punjab National 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 Punjab National Bank are associated (or correlated) with Sukhjit Starch. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sukhjit Starch Chemicals has no effect on the direction of Punjab National i.e., Punjab National and Sukhjit Starch go up and down completely randomly.
Pair Corralation between Punjab National and Sukhjit Starch
Assuming the 90 days trading horizon Punjab National is expected to generate 2.73 times less return on investment than Sukhjit Starch. But when comparing it to its historical volatility, Punjab National Bank is 4.46 times less risky than Sukhjit Starch. It trades about 0.08 of its potential returns per unit of risk. Sukhjit Starch Chemicals is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 19,070 in Sukhjit Starch Chemicals on September 14, 2024 and sell it today you would earn a total of 10,940 from holding Sukhjit Starch Chemicals or generate 57.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Punjab National Bank vs. Sukhjit Starch Chemicals
Performance |
| Timeline |
| Punjab National Bank |
| Sukhjit Starch Chemicals |
Punjab National and Sukhjit Starch Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Punjab National and Sukhjit Starch
The main advantage of trading using opposite Punjab National and Sukhjit Starch positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Punjab National position performs unexpectedly, Sukhjit Starch 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 Sukhjit Starch will offset losses from the drop in Sukhjit Starch's long position.| Punjab National vs. Reliance Industries Limited | Punjab National vs. State Bank of | Punjab National vs. Oil Natural Gas | Punjab National vs. ICICI Bank Limited |
| Sukhjit Starch vs. UCO Bank | Sukhjit Starch vs. Punjab National Bank | Sukhjit Starch vs. Reliance Communications Limited | Sukhjit Starch vs. Kotak Mahindra Bank |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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