Correlation Between State Bank and Bannari Amman
Can any of the company-specific risk be diversified away by investing in both State Bank and Bannari Amman 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 Bannari Amman 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 Bannari Amman Spinning, you can compare the effects of market volatilities on State Bank and Bannari Amman 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 Bannari Amman. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Bannari Amman.
Diversification Opportunities for State Bank and Bannari Amman
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Bannari is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Bannari Amman Spinning in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bannari Amman Spinning 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 Bannari Amman. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bannari Amman Spinning has no effect on the direction of State Bank i.e., State Bank and Bannari Amman go up and down completely randomly.
Pair Corralation between State Bank and Bannari Amman
Assuming the 90 days trading horizon State Bank of is expected to generate 0.74 times more return on investment than Bannari Amman. However, State Bank of is 1.34 times less risky than Bannari Amman. It trades about 0.07 of its potential returns per unit of risk. Bannari Amman Spinning is currently generating about -0.03 per unit of risk. If you would invest 82,020 in State Bank of on September 1, 2024 and sell it today you would earn a total of 1,875 from holding State Bank of or generate 2.29% 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. Bannari Amman Spinning
Performance |
| Timeline |
| State Bank |
| Bannari Amman Spinning |
State Bank and Bannari Amman Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Bannari Amman
The main advantage of trading using opposite State Bank and Bannari Amman positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Bannari Amman 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 Bannari Amman will offset losses from the drop in Bannari Amman's long position.| State Bank vs. Allied Blenders Distillers | State Bank vs. HDFC Asset Management | State Bank vs. IDBI Bank Limited | State Bank vs. DCB Bank Limited |
| Bannari Amman vs. Mahamaya Steel Industries | Bannari Amman vs. Bharat Road Network | Bannari Amman vs. Associated Alcohols Breweries | Bannari Amman vs. Music Broadcast 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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