Correlation Between State Bank and Servotech Power
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By analyzing existing cross correlation between State Bank of and Servotech Power Systems, you can compare the effects of market volatilities on State Bank and Servotech Power 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 Servotech Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Servotech Power.
Diversification Opportunities for State Bank and Servotech Power
0.23 | Correlation Coefficient |
Modest diversification
The 3 months correlation between State and Servotech is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Servotech Power Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Servotech Power Systems 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 Servotech Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Servotech Power Systems has no effect on the direction of State Bank i.e., State Bank and Servotech Power go up and down completely randomly.
Pair Corralation between State Bank and Servotech Power
Assuming the 90 days trading horizon State Bank is expected to generate 2.25 times less return on investment than Servotech Power. But when comparing it to its historical volatility, State Bank of is 1.75 times less risky than Servotech Power. It trades about 0.09 of its potential returns per unit of risk. Servotech Power Systems is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 7,663 in Servotech Power Systems on September 1, 2024 and sell it today you would earn a total of 10,238 from holding Servotech Power Systems or generate 133.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 98.87% |
| Values | Daily Returns |
State Bank of vs. Servotech Power Systems
Performance |
| Timeline |
| State Bank |
| Servotech Power Systems |
State Bank and Servotech Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Servotech Power
The main advantage of trading using opposite State Bank and Servotech Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Servotech Power 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 Servotech Power will offset losses from the drop in Servotech Power's long position.| State Bank vs. Allied Blenders Distillers | State Bank vs. HDFC Asset Management | State Bank vs. IDBI Bank Limited | State Bank vs. DCB Bank Limited |
| Servotech Power vs. Reliance Industries Limited | Servotech Power vs. HDFC Bank Limited | Servotech Power vs. Kingfa Science Technology | Servotech Power vs. Rico Auto Industries |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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