Correlation Between State Bank and Oriental Hotels
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By analyzing existing cross correlation between State Bank of and Oriental Hotels Limited, you can compare the effects of market volatilities on State Bank and Oriental 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 Oriental Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Oriental Hotels.
Diversification Opportunities for State Bank and Oriental Hotels
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Oriental is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Oriental Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Oriental 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 Oriental Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Oriental Hotels has no effect on the direction of State Bank i.e., State Bank and Oriental Hotels go up and down completely randomly.
Pair Corralation between State Bank and Oriental Hotels
Assuming the 90 days trading horizon State Bank is expected to generate 2.39 times less return on investment than Oriental Hotels. But when comparing it to its historical volatility, State Bank of is 1.29 times less risky than Oriental Hotels. It trades about 0.13 of its potential returns per unit of risk. Oriental Hotels Limited is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 17,781 in Oriental Hotels Limited on September 13, 2024 and sell it today you would earn a total of 1,888 from holding Oriental Hotels Limited or generate 10.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Oriental Hotels Limited
Performance |
| Timeline |
| State Bank |
| Oriental Hotels |
State Bank and Oriental Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Oriental Hotels
The main advantage of trading using opposite State Bank and Oriental Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Oriental 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 Oriental Hotels will offset losses from the drop in Oriental Hotels' long position.| State Bank vs. Reliance Industries Limited | State Bank vs. Oil Natural Gas | State Bank vs. ICICI Bank Limited |
| Oriental Hotels vs. Indian Railway Finance | Oriental Hotels vs. Cholamandalam Financial Holdings | Oriental Hotels vs. Reliance Industries Limited | Oriental Hotels vs. Tata Consultancy Services |
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 Stocks Directory module to find actively traded stocks across global markets.
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