Correlation Between State Bank and Coal India
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By analyzing existing cross correlation between State Bank of and Coal India Limited, you can compare the effects of market volatilities on State Bank and Coal India 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 Coal India. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Coal India.
Diversification Opportunities for State Bank and Coal India
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Coal is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Coal India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coal India 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 Coal India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coal India Limited has no effect on the direction of State Bank i.e., State Bank and Coal India go up and down completely randomly.
Pair Corralation between State Bank and Coal India
Assuming the 90 days trading horizon State Bank is expected to generate 2.12 times less return on investment than Coal India. But when comparing it to its historical volatility, State Bank of is 1.29 times less risky than Coal India. It trades about 0.05 of its potential returns per unit of risk. Coal India Limited is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 20,071 in Coal India Limited on August 27, 2024 and sell it today you would earn a total of 21,334 from holding Coal India Limited or generate 106.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.59% |
| Values | Daily Returns |
State Bank of vs. Coal India Limited
Performance |
| Timeline |
| State Bank |
| Coal India Limited |
State Bank and Coal India Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Coal India
The main advantage of trading using opposite State Bank and Coal India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Coal India 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 Coal India will offset losses from the drop in Coal India's long position.| State Bank vs. Zuari Agro Chemicals | State Bank vs. Gujarat Fluorochemicals Limited | State Bank vs. Hemisphere Properties India | State Bank vs. Gallantt Ispat Limited |
| Coal India vs. Dhunseri Investments Limited | Coal India vs. Associated Alcohols Breweries | Coal India vs. Allied Blenders Distillers | Coal India vs. Varun Beverages 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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