Correlation Between REC and State Bank
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By analyzing existing cross correlation between REC Limited and State Bank of, you can compare the effects of market volatilities on REC and State 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 REC with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of REC and State Bank.
Diversification Opportunities for REC and State Bank
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between REC and State is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding REC Limited and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of REC i.e., REC and State Bank go up and down completely randomly.
Pair Corralation between REC and State Bank
Assuming the 90 days trading horizon REC Limited is expected to under-perform the State Bank. In addition to that, REC is 3.11 times more volatile than State Bank of. It trades about -0.13 of its total potential returns per unit of risk. State Bank of is currently generating about -0.21 per unit of volatility. If you would invest 74,920 in State Bank of on November 28, 2024 and sell it today you would lose (3,830) from holding State Bank of or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
REC Limited vs. State Bank of
Performance |
| Timeline |
| REC Limited |
| State Bank |
REC and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REC and State Bank
The main advantage of trading using opposite REC and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REC position performs unexpectedly, State 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 State Bank will offset losses from the drop in State Bank's long position.| REC vs. Dharani SugarsChemicals Limited | REC vs. IOL Chemicals and | REC vs. Chambal Fertilizers Chemicals | REC vs. TECIL Chemicals and |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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