Correlation Between State Bank and Samhi Hotels
Can any of the company-specific risk be diversified away by investing in both State Bank and Samhi Hotels 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 Samhi Hotels 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 Samhi Hotels Limited, you can compare the effects of market volatilities on State Bank and Samhi 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 Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Samhi Hotels.
Diversification Opportunities for State Bank and Samhi Hotels
-0.48 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Samhi is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi Hotels 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of State Bank i.e., State Bank and Samhi Hotels go up and down completely randomly.
Pair Corralation between State Bank and Samhi Hotels
Assuming the 90 days trading horizon State Bank is expected to generate 2.1 times less return on investment than Samhi Hotels. But when comparing it to its historical volatility, State Bank of is 1.16 times less risky than Samhi Hotels. It trades about 0.08 of its potential returns per unit of risk. Samhi Hotels Limited is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest 18,292 in Samhi Hotels Limited on September 5, 2024 and sell it today you would earn a total of 1,181 from holding Samhi Hotels Limited or generate 6.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Samhi Hotels Limited
Performance |
| Timeline |
| State Bank |
| Samhi Hotels Limited |
State Bank and Samhi Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Samhi Hotels
The main advantage of trading using opposite State Bank and Samhi Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Samhi 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 Samhi Hotels will offset losses from the drop in Samhi Hotels' long position.| State Bank vs. Reliance Industries Limited | State Bank vs. Tata Consultancy Services | State Bank vs. HDFC Bank Limited | State Bank vs. Bharti Airtel Limited |
| Samhi Hotels vs. Reliance Industries Limited | Samhi Hotels vs. State Bank of | Samhi Hotels vs. HDFC Bank Limited | Samhi Hotels vs. Oil Natural Gas |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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