Correlation Between State Bank and BF Investment
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By analyzing existing cross correlation between State Bank of and BF Investment Limited, you can compare the effects of market volatilities on State Bank and BF Investment 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 BF Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and BF Investment.
Diversification Opportunities for State Bank and BF Investment
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between State and BFINVEST is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and BF Investment Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BF Investment 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 BF Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BF Investment Limited has no effect on the direction of State Bank i.e., State Bank and BF Investment go up and down completely randomly.
Pair Corralation between State Bank and BF Investment
Assuming the 90 days trading horizon State Bank is expected to generate 1.59 times less return on investment than BF Investment. But when comparing it to its historical volatility, State Bank of is 1.3 times less risky than BF Investment. It trades about 0.14 of its potential returns per unit of risk. BF Investment Limited is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 65,660 in BF Investment Limited on August 29, 2024 and sell it today you would earn a total of 6,340 from holding BF Investment Limited or generate 9.66% 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. BF Investment Limited
Performance |
| Timeline |
| State Bank |
| BF Investment Limited |
State Bank and BF Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and BF Investment
The main advantage of trading using opposite State Bank and BF Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, BF Investment 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 BF Investment will offset losses from the drop in BF Investment's long position.| State Bank vs. MRF Limited | State Bank vs. JSW Holdings Limited | State Bank vs. Maharashtra Scooters Limited | State Bank vs. Nalwa Sons Investments |
| BF Investment vs. NMDC Steel Limited | BF Investment vs. Vraj Iron and | BF Investment vs. Embassy Office Parks | BF Investment vs. Steelcast 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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