Correlation Between State Bank and Entertainment Network
Can any of the company-specific risk be diversified away by investing in both State Bank and Entertainment Network 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 Entertainment Network 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 Entertainment Network Limited, you can compare the effects of market volatilities on State Bank and Entertainment Network 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 Entertainment Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Entertainment Network.
Diversification Opportunities for State Bank and Entertainment Network
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Entertainment is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Entertainment Network Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Entertainment Network 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 Entertainment Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Entertainment Network has no effect on the direction of State Bank i.e., State Bank and Entertainment Network go up and down completely randomly.
Pair Corralation between State Bank and Entertainment Network
Assuming the 90 days trading horizon State Bank of is expected to under-perform the Entertainment Network. But the stock apears to be less risky and, when comparing its historical volatility, State Bank of is 1.1 times less risky than Entertainment Network. The stock trades about -0.47 of its potential returns per unit of risk. The Entertainment Network Limited is currently generating about -0.3 of returns per unit of risk over similar time horizon. If you would invest 19,136 in Entertainment Network Limited on October 10, 2024 and sell it today you would lose (1,428) from holding Entertainment Network Limited or give up 7.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Entertainment Network Limited
Performance |
| Timeline |
| State Bank |
| Entertainment Network |
State Bank and Entertainment Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Entertainment Network
The main advantage of trading using opposite State Bank and Entertainment Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Entertainment Network 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 Entertainment Network will offset losses from the drop in Entertainment Network's long position.| State Bank vs. Motilal Oswal Financial | State Bank vs. Sudarshan Chemical Industries | State Bank vs. DMCC SPECIALITY CHEMICALS | State Bank vs. ICICI Bank Limited |
| Entertainment Network vs. Zodiac Clothing | Entertainment Network vs. Industrial Investment Trust | Entertainment Network vs. Cartrade Tech Limited | Entertainment Network vs. Lakshmi Finance Industrial |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments |