Correlation Between State Bank and Apex Frozen
Can any of the company-specific risk be diversified away by investing in both State Bank and Apex Frozen 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 Apex Frozen 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 Apex Frozen Foods, you can compare the effects of market volatilities on State Bank and Apex Frozen 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 Apex Frozen. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Apex Frozen.
Diversification Opportunities for State Bank and Apex Frozen
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Apex is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Apex Frozen Foods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apex Frozen Foods 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 Apex Frozen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apex Frozen Foods has no effect on the direction of State Bank i.e., State Bank and Apex Frozen go up and down completely randomly.
Pair Corralation between State Bank and Apex Frozen
Assuming the 90 days trading horizon State Bank of is expected to generate 0.57 times more return on investment than Apex Frozen. However, State Bank of is 1.76 times less risky than Apex Frozen. It trades about 0.05 of its potential returns per unit of risk. Apex Frozen Foods is currently generating about 0.01 per unit of risk. If you would invest 56,448 in State Bank of on November 28, 2024 and sell it today you would earn a total of 14,642 from holding State Bank of or generate 25.94% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Apex Frozen Foods
Performance |
| Timeline |
| State Bank |
| Apex Frozen Foods |
State Bank and Apex Frozen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Apex Frozen
The main advantage of trading using opposite State Bank and Apex Frozen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Apex Frozen 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 Apex Frozen will offset losses from the drop in Apex Frozen's long position.| State Bank vs. Network18 Media Investments | State Bank vs. Entertainment Network Limited | State Bank vs. Sambhaav Media Limited | State Bank vs. Zee Entertainment Enterprises |
| Apex Frozen vs. Vishnu Chemicals Limited | Apex Frozen vs. Fertilizers and Chemicals | Apex Frozen vs. Chambal Fertilizers Chemicals | Apex Frozen vs. Neogen Chemicals 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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