Correlation Between State Bank and SIS
Can any of the company-specific risk be diversified away by investing in both State Bank and SIS 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 SIS 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 SIS LIMITED, you can compare the effects of market volatilities on State Bank and SIS 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 SIS. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and SIS.
Diversification Opportunities for State Bank and SIS
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and SIS is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and SIS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SIS 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 SIS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SIS LIMITED has no effect on the direction of State Bank i.e., State Bank and SIS go up and down completely randomly.
Pair Corralation between State Bank and SIS
Assuming the 90 days trading horizon State Bank of is expected to generate 1.19 times more return on investment than SIS. However, State Bank is 1.19 times more volatile than SIS LIMITED. It trades about 0.07 of its potential returns per unit of risk. SIS LIMITED is currently generating about -0.02 per unit of risk. If you would invest 79,455 in State Bank of on August 25, 2024 and sell it today you would earn a total of 2,150 from holding State Bank of or generate 2.71% 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. SIS LIMITED
Performance |
| Timeline |
| State Bank |
| SIS LIMITED |
State Bank and SIS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and SIS
The main advantage of trading using opposite State Bank and SIS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, SIS 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 SIS will offset losses from the drop in SIS's long position.| State Bank vs. Max Financial Services | State Bank vs. Geojit Financial Services | State Bank vs. Datamatics Global Services | State Bank vs. Chalet Hotels Limited |
| SIS vs. Datamatics Global Services | SIS vs. Metalyst Forgings Limited | SIS vs. Repco Home Finance | SIS vs. Indian Metals Ferro |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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