Correlation Between State Bank and Futura Medical
Can any of the company-specific risk be diversified away by investing in both State Bank and Futura Medical 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 Futura Medical 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 Futura Medical, you can compare the effects of market volatilities on State Bank and Futura Medical 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 Futura Medical. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Futura Medical.
Diversification Opportunities for State Bank and Futura Medical
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between State and Futura is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Futura Medical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Futura Medical 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 Futura Medical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Futura Medical has no effect on the direction of State Bank i.e., State Bank and Futura Medical go up and down completely randomly.
Pair Corralation between State Bank and Futura Medical
Assuming the 90 days trading horizon State Bank of is expected to generate 1.03 times more return on investment than Futura Medical. However, State Bank is 1.03 times more volatile than Futura Medical. It trades about 0.07 of its potential returns per unit of risk. Futura Medical is currently generating about -0.22 per unit of risk. If you would invest 9,740 in State Bank of on August 31, 2024 and sell it today you would earn a total of 240.00 from holding State Bank of or generate 2.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Futura Medical
Performance |
| Timeline |
| State Bank |
| Futura Medical |
State Bank and Futura Medical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Futura Medical
The main advantage of trading using opposite State Bank and Futura Medical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Futura Medical 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 Futura Medical will offset losses from the drop in Futura Medical's long position.| State Bank vs. Advanced Medical Solutions | State Bank vs. Westlake Chemical Corp | State Bank vs. McEwen Mining | State Bank vs. Elmos Semiconductor SE |
| Futura Medical vs. Toyota Motor Corp | Futura Medical vs. SoftBank Group Corp | Futura Medical vs. State Bank of | Futura Medical vs. MOL Hungarian Oil |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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