Correlation Between State Bank and Oil Natural
Can any of the company-specific risk be diversified away by investing in both State Bank and Oil Natural 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 Oil Natural 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 Oil Natural Gas, you can compare the effects of market volatilities on State Bank and Oil Natural 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 Oil Natural. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Oil Natural.
Diversification Opportunities for State Bank and Oil Natural
-0.11 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Oil is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Oil Natural Gas in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oil Natural Gas 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 Oil Natural. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oil Natural Gas has no effect on the direction of State Bank i.e., State Bank and Oil Natural go up and down completely randomly.
Pair Corralation between State Bank and Oil Natural
Assuming the 90 days trading horizon State Bank is expected to generate 1.88 times less return on investment than Oil Natural. But when comparing it to its historical volatility, State Bank of is 1.24 times less risky than Oil Natural. It trades about 0.05 of its potential returns per unit of risk. Oil Natural Gas is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 12,663 in Oil Natural Gas on August 28, 2024 and sell it today you would earn a total of 13,127 from holding Oil Natural Gas or generate 103.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
State Bank of vs. Oil Natural Gas
Performance |
| Timeline |
| State Bank |
| Oil Natural Gas |
State Bank and Oil Natural Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Oil Natural
The main advantage of trading using opposite State Bank and Oil Natural positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Oil Natural 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 Oil Natural will offset losses from the drop in Oil Natural's long position.| State Bank vs. Zuari Agro Chemicals | State Bank vs. Gujarat Fluorochemicals Limited | State Bank vs. Hemisphere Properties India | State Bank vs. Gallantt Ispat Limited |
| Oil Natural vs. TECIL Chemicals and | Oil Natural vs. Krebs Biochemicals and | Oil Natural vs. Manaksia Coated Metals | Oil Natural vs. Hilton Metal Forging |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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