Correlation Between State Bank and Punjab Sind
Can any of the company-specific risk be diversified away by investing in both State Bank and Punjab Sind 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 Punjab Sind 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 Punjab Sind Bank, you can compare the effects of market volatilities on State Bank and Punjab Sind 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 Punjab Sind. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Punjab Sind.
Diversification Opportunities for State Bank and Punjab Sind
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Punjab is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Punjab Sind Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab Sind Bank 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 Punjab Sind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab Sind Bank has no effect on the direction of State Bank i.e., State Bank and Punjab Sind go up and down completely randomly.
Pair Corralation between State Bank and Punjab Sind
Assuming the 90 days trading horizon State Bank of is expected to generate 0.8 times more return on investment than Punjab Sind. However, State Bank of is 1.24 times less risky than Punjab Sind. It trades about 0.04 of its potential returns per unit of risk. Punjab Sind Bank is currently generating about -0.07 per unit of risk. If you would invest 82,985 in State Bank of on September 3, 2024 and sell it today you would earn a total of 910.00 from holding State Bank of or generate 1.1% 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. Punjab Sind Bank
Performance |
| Timeline |
| State Bank |
| Punjab Sind Bank |
State Bank and Punjab Sind Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Punjab Sind
The main advantage of trading using opposite State Bank and Punjab Sind positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Punjab Sind 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 Punjab Sind will offset losses from the drop in Punjab Sind's long position.| State Bank vs. Sonata Software Limited | State Bank vs. Sarveshwar Foods Limited | State Bank vs. Agro Tech Foods | State Bank vs. Tamilnadu Telecommunication Limited |
| Punjab Sind vs. Hindware Home Innovation | Punjab Sind vs. Repco Home Finance | Punjab Sind vs. Reliance Communications Limited | Punjab Sind vs. Tamilnadu Telecommunication 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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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