Correlation Between State Bank and Syrma SGS
Can any of the company-specific risk be diversified away by investing in both State Bank and Syrma SGS 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 Syrma SGS 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 Syrma SGS Technology, you can compare the effects of market volatilities on State Bank and Syrma SGS 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 Syrma SGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Syrma SGS.
Diversification Opportunities for State Bank and Syrma SGS
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Syrma is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Syrma SGS Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Syrma SGS Technology 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 Syrma SGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Syrma SGS Technology has no effect on the direction of State Bank i.e., State Bank and Syrma SGS go up and down completely randomly.
Pair Corralation between State Bank and Syrma SGS
Assuming the 90 days trading horizon State Bank is expected to generate 15.25 times less return on investment than Syrma SGS. But when comparing it to its historical volatility, State Bank of is 1.69 times less risky than Syrma SGS. It trades about 0.03 of its potential returns per unit of risk. Syrma SGS Technology is currently generating about 0.24 of returns per unit of risk over similar time horizon. If you would invest 49,745 in Syrma SGS Technology on August 30, 2024 and sell it today you would earn a total of 8,295 from holding Syrma SGS Technology or generate 16.68% 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. Syrma SGS Technology
Performance |
| Timeline |
| State Bank |
| Syrma SGS Technology |
State Bank and Syrma SGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Syrma SGS
The main advantage of trading using opposite State Bank and Syrma SGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Syrma SGS 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 Syrma SGS will offset losses from the drop in Syrma SGS's long position.| State Bank vs. Transport of | State Bank vs. Krebs Biochemicals and | State Bank vs. Shivalik Bimetal Controls | State Bank vs. Rajnandini Metal Limited |
| Syrma SGS vs. Kingfa Science Technology | Syrma SGS vs. Rico Auto Industries | Syrma SGS vs. GACM Technologies Limited | Syrma SGS vs. COSMO FIRST 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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