Correlation Between SBI Cards and Power Finance
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By analyzing existing cross correlation between SBI Cards and and Power Finance, you can compare the effects of market volatilities on SBI Cards and Power Finance 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 SBI Cards with a short position of Power Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Cards and Power Finance.
Diversification Opportunities for SBI Cards and Power Finance
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between SBI and Power is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding SBI Cards and and Power Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Finance and SBI Cards 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 SBI Cards and are associated (or correlated) with Power Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Finance has no effect on the direction of SBI Cards i.e., SBI Cards and Power Finance go up and down completely randomly.
Pair Corralation between SBI Cards and Power Finance
Assuming the 90 days trading horizon SBI Cards is expected to generate 9.63 times less return on investment than Power Finance. But when comparing it to its historical volatility, SBI Cards and is 2.55 times less risky than Power Finance. It trades about 0.04 of its potential returns per unit of risk. Power Finance is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 45,574 in Power Finance on September 2, 2024 and sell it today you would earn a total of 3,956 from holding Power Finance or generate 8.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Cards and vs. Power Finance
Performance |
| Timeline |
| SBI Cards |
| Power Finance |
SBI Cards and Power Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Cards and Power Finance
The main advantage of trading using opposite SBI Cards and Power Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Cards position performs unexpectedly, Power Finance 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 Power Finance will offset losses from the drop in Power Finance's long position.| SBI Cards vs. Advani Hotels Resorts | SBI Cards vs. Reliance Home Finance | SBI Cards vs. Chalet Hotels Limited | SBI Cards vs. EIH Associated Hotels |
| Power Finance vs. State Bank of | Power Finance vs. Life Insurance | Power Finance vs. HDFC Bank Limited | Power Finance vs. ICICI Bank 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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