Correlation Between State Bank and DFS Furniture
Can any of the company-specific risk be diversified away by investing in both State Bank and DFS Furniture at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining State Bank and DFS Furniture into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and DFS Furniture PLC, you can compare the effects of market volatilities on State Bank and DFS Furniture 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 State Bank with a short position of DFS Furniture. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and DFS Furniture.
Diversification Opportunities for State Bank and DFS Furniture
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between State and DFS is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and DFS Furniture PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFS Furniture PLC and State 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 State Bank of are associated (or correlated) with DFS Furniture. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFS Furniture PLC has no effect on the direction of State Bank i.e., State Bank and DFS Furniture go up and down completely randomly.
Pair Corralation between State Bank and DFS Furniture
Assuming the 90 days trading horizon State Bank of is expected to generate 0.77 times more return on investment than DFS Furniture. However, State Bank of is 1.29 times less risky than DFS Furniture. It trades about 0.04 of its potential returns per unit of risk. DFS Furniture PLC is currently generating about 0.01 per unit of risk. If you would invest 7,244 in State Bank of on August 27, 2024 and sell it today you would earn a total of 2,406 from holding State Bank of or generate 33.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. DFS Furniture PLC
Performance |
| Timeline |
| State Bank |
| DFS Furniture PLC |
State Bank and DFS Furniture Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and DFS Furniture
The main advantage of trading using opposite State Bank and DFS Furniture positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, DFS Furniture 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 DFS Furniture will offset losses from the drop in DFS Furniture's long position.| State Bank vs. Spirent Communications plc | State Bank vs. Zoom Video Communications | State Bank vs. Team Internet Group | State Bank vs. Universal Display Corp |
| DFS Furniture vs. Rockfire Resources plc | DFS Furniture vs. Tlou Energy | DFS Furniture vs. Ikigai Ventures | DFS Furniture vs. Falcon Oil Gas |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |