Correlation Between State Bank and Bandhan Bank
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By analyzing existing cross correlation between State Bank of and Bandhan Bank Limited, you can compare the effects of market volatilities on State Bank and Bandhan 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 State Bank with a short position of Bandhan Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Bandhan Bank.
Diversification Opportunities for State Bank and Bandhan Bank
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between State and Bandhan is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Bandhan Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bandhan Bank Limited 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 Bandhan Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bandhan Bank Limited has no effect on the direction of State Bank i.e., State Bank and Bandhan Bank go up and down completely randomly.
Pair Corralation between State Bank and Bandhan Bank
Assuming the 90 days trading horizon State Bank of is expected to generate 1.31 times more return on investment than Bandhan Bank. However, State Bank is 1.31 times more volatile than Bandhan Bank Limited. It trades about 0.17 of its potential returns per unit of risk. Bandhan Bank Limited is currently generating about 0.13 per unit of risk. If you would invest 80,865 in State Bank of on September 14, 2024 and sell it today you would earn a total of 4,505 from holding State Bank of or generate 5.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Bandhan Bank Limited
Performance |
| Timeline |
| State Bank |
| Bandhan Bank Limited |
State Bank and Bandhan Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Bandhan Bank
The main advantage of trading using opposite State Bank and Bandhan Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Bandhan 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 Bandhan Bank will offset losses from the drop in Bandhan Bank's long position.| State Bank vs. Reliance Industries Limited | State Bank vs. Oil Natural Gas | State Bank vs. ICICI Bank Limited |
| Bandhan Bank vs. Reliance Industries Limited | Bandhan Bank vs. State Bank of | Bandhan Bank vs. Oil Natural Gas | Bandhan Bank 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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