Correlation Between State Bank and LT Foods
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By analyzing existing cross correlation between State Bank of and LT Foods Limited, you can compare the effects of market volatilities on State Bank and LT Foods 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 LT Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and LT Foods.
Diversification Opportunities for State Bank and LT Foods
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and LTFOODS is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and LT Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Foods 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 LT Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Foods Limited has no effect on the direction of State Bank i.e., State Bank and LT Foods go up and down completely randomly.
Pair Corralation between State Bank and LT Foods
Assuming the 90 days trading horizon State Bank of is expected to generate 0.59 times more return on investment than LT Foods. However, State Bank of is 1.69 times less risky than LT Foods. It trades about 0.08 of its potential returns per unit of risk. LT Foods Limited is currently generating about -0.02 per unit of risk. If you would invest 78,790 in State Bank of on August 30, 2024 and sell it today you would earn a total of 4,620 from holding State Bank of or generate 5.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. LT Foods Limited
Performance |
| Timeline |
| State Bank |
| LT Foods Limited |
State Bank and LT Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and LT Foods
The main advantage of trading using opposite State Bank and LT Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, LT Foods 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 LT Foods will offset losses from the drop in LT Foods' long position.| State Bank vs. Transport of | State Bank vs. Krebs Biochemicals and | State Bank vs. Shivalik Bimetal Controls | State Bank vs. Rajnandini Metal Limited |
| LT Foods vs. State Bank of | LT Foods vs. Life Insurance | LT Foods vs. HDFC Bank Limited | LT Foods 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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