Correlation Between State Bank and Home First
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By analyzing existing cross correlation between State Bank of and Home First Finance, you can compare the effects of market volatilities on State Bank and Home First 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 Home First. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Home First.
Diversification Opportunities for State Bank and Home First
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Home is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Home First Finance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Home First Finance 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 Home First. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Home First Finance has no effect on the direction of State Bank i.e., State Bank and Home First go up and down completely randomly.
Pair Corralation between State Bank and Home First
Assuming the 90 days trading horizon State Bank of is expected to generate 0.49 times more return on investment than Home First. However, State Bank of is 2.03 times less risky than Home First. It trades about -0.21 of its potential returns per unit of risk. Home First Finance is currently generating about -0.19 per unit of risk. If you would invest 74,920 in State Bank of on November 28, 2024 and sell it today you would lose (3,830) from holding State Bank of or give up 5.11% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Home First Finance
Performance |
| Timeline |
| State Bank |
| Home First Finance |
State Bank and Home First Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Home First
The main advantage of trading using opposite State Bank and Home First positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Home First 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 Home First will offset losses from the drop in Home First's long position.| State Bank vs. Network18 Media Investments | State Bank vs. Entertainment Network Limited | State Bank vs. Sambhaav Media Limited | State Bank vs. Zee Entertainment Enterprises |
| Home First vs. Gujarat Fluorochemicals Limited | Home First vs. Dharani SugarsChemicals Limited | Home First vs. Gallantt Ispat Limited | Home First vs. Computer Age Management |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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