Correlation Between State Bank and Indian Hotels
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By analyzing existing cross correlation between State Bank of and The Indian Hotels, you can compare the effects of market volatilities on State Bank and Indian Hotels 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 Indian Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Indian Hotels.
Diversification Opportunities for State Bank and Indian Hotels
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between State and Indian is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and The Indian Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indian Hotels 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 Indian Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indian Hotels has no effect on the direction of State Bank i.e., State Bank and Indian Hotels go up and down completely randomly.
Pair Corralation between State Bank and Indian Hotels
Assuming the 90 days trading horizon State Bank of is expected to generate 0.57 times more return on investment than Indian Hotels. However, State Bank of is 1.74 times less risky than Indian Hotels. It trades about -0.23 of its potential returns per unit of risk. The Indian Hotels is currently generating about -0.18 per unit of risk. If you would invest 79,965 in State Bank of on October 28, 2024 and sell it today you would lose (5,550) from holding State Bank of or give up 6.94% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. The Indian Hotels
Performance |
| Timeline |
| State Bank |
| Indian Hotels |
State Bank and Indian Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Indian Hotels
The main advantage of trading using opposite State Bank and Indian Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Indian Hotels 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 Indian Hotels will offset losses from the drop in Indian Hotels' long position.| State Bank vs. Indian Metals Ferro | State Bank vs. Alkali Metals Limited | State Bank vs. Samhi Hotels Limited | State Bank vs. Taj GVK Hotels |
| Indian Hotels vs. Gallantt Ispat Limited | Indian Hotels vs. VIP Clothing Limited | Indian Hotels vs. Rainbow Childrens Medicare | Indian Hotels vs. Sudarshan Chemical Industries |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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