Correlation Between State Bank and Federal Bank
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By analyzing existing cross correlation between State Bank of and The Federal Bank, you can compare the effects of market volatilities on State Bank and Federal 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 Federal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Federal Bank.
Diversification Opportunities for State Bank and Federal Bank
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between State and Federal is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank 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 Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of State Bank i.e., State Bank and Federal Bank go up and down completely randomly.
Pair Corralation between State Bank and Federal Bank
Assuming the 90 days trading horizon State Bank of is expected to generate 1.12 times more return on investment than Federal Bank. However, State Bank is 1.12 times more volatile than The Federal Bank. It trades about 0.13 of its potential returns per unit of risk. The Federal Bank is currently generating about 0.12 per unit of risk. If you would invest 82,670 in State Bank of on September 13, 2024 and sell it today you would earn a total of 3,490 from holding State Bank of or generate 4.22% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. The Federal Bank
Performance |
| Timeline |
| State Bank |
| Federal Bank |
State Bank and Federal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Federal Bank
The main advantage of trading using opposite State Bank and Federal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Federal 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 Federal Bank will offset losses from the drop in Federal Bank's long position.| State Bank vs. Reliance Industries Limited | State Bank vs. Oil Natural Gas | State Bank vs. ICICI Bank Limited |
| Federal Bank vs. Reliance Industries Limited | Federal Bank vs. State Bank of | Federal Bank vs. Oil Natural Gas | Federal 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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