Correlation Between REC and SBI Cards
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By analyzing existing cross correlation between REC Limited and SBI Cards and, you can compare the effects of market volatilities on REC and SBI Cards 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 REC with a short position of SBI Cards. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC and SBI Cards.
Diversification Opportunities for REC and SBI Cards
Very weak diversification
The 3 months correlation between REC and SBI is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding REC Limited and SBI Cards and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Cards and REC 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 REC Limited are associated (or correlated) with SBI Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Cards has no effect on the direction of REC i.e., REC and SBI Cards go up and down completely randomly.
Pair Corralation between REC and SBI Cards
Assuming the 90 days trading horizon REC Limited is expected to generate 2.0 times more return on investment than SBI Cards. However, REC is 2.0 times more volatile than SBI Cards and. It trades about 0.04 of its potential returns per unit of risk. SBI Cards and is currently generating about 0.04 per unit of risk. If you would invest 52,680 in REC Limited on September 2, 2024 and sell it today you would earn a total of 580.00 from holding REC Limited or generate 1.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REC Limited vs. SBI Cards and
Performance |
| Timeline |
| REC Limited |
| SBI Cards |
REC and SBI Cards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC and SBI Cards
The main advantage of trading using opposite REC and SBI Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC position performs unexpectedly, SBI Cards 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 Cards will offset losses from the drop in SBI Cards' long position.| REC vs. Tata Investment | REC vs. Kalyani Investment | REC vs. Popular Vehicles and | REC vs. Tamilnadu Telecommunication Limited |
| SBI Cards vs. Advani Hotels Resorts | SBI Cards vs. Reliance Home Finance | SBI Cards vs. Chalet Hotels Limited | SBI Cards vs. EIH Associated Hotels |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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