Correlation Between RBL Bank and Centum Electronics
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By analyzing existing cross correlation between RBL Bank Limited and Centum Electronics Limited, you can compare the effects of market volatilities on RBL Bank and Centum Electronics 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 RBL Bank with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of RBL Bank and Centum Electronics.
Diversification Opportunities for RBL Bank and Centum Electronics
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between RBL and Centum is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding RBL Bank Limited and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and RBL Bank 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 RBL Bank Limited are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of RBL Bank i.e., RBL Bank and Centum Electronics go up and down completely randomly.
Pair Corralation between RBL Bank and Centum Electronics
Assuming the 90 days trading horizon RBL Bank Limited is expected to generate 0.74 times more return on investment than Centum Electronics. However, RBL Bank Limited is 1.35 times less risky than Centum Electronics. It trades about 0.04 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about -0.23 per unit of risk. If you would invest 16,602 in RBL Bank Limited on November 8, 2024 and sell it today you would earn a total of 232.00 from holding RBL Bank Limited or generate 1.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
RBL Bank Limited vs. Centum Electronics Limited
Performance |
| Timeline |
| RBL Bank Limited |
| Centum Electronics |
RBL Bank and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with RBL Bank and Centum Electronics
The main advantage of trading using opposite RBL Bank and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if RBL Bank position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| RBL Bank vs. Jayant Agro Organics | RBL Bank vs. Varun Beverages Limited | RBL Bank vs. Apex Frozen Foods | RBL Bank vs. Vinati Organics Limited |
| Centum Electronics vs. Ankit Metal Power | Centum Electronics vs. V2 Retail Limited | Centum Electronics vs. Hilton Metal Forging | Centum Electronics vs. Rajnandini Metal 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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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