Correlation Between State Bank and Tata Investment
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By analyzing existing cross correlation between State Bank of and Tata Investment, you can compare the effects of market volatilities on State Bank and Tata Investment 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 Tata Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Tata Investment.
Diversification Opportunities for State Bank and Tata Investment
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Tata is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Tata Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tata Investment 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 Tata Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tata Investment has no effect on the direction of State Bank i.e., State Bank and Tata Investment go up and down completely randomly.
Pair Corralation between State Bank and Tata Investment
Assuming the 90 days trading horizon State Bank of is expected to generate 1.04 times more return on investment than Tata Investment. However, State Bank is 1.04 times more volatile than Tata Investment. It trades about -0.04 of its potential returns per unit of risk. Tata Investment is currently generating about -0.08 per unit of risk. If you would invest 79,455 in State Bank of on October 24, 2024 and sell it today you would lose (3,550) from holding State Bank of or give up 4.47% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
State Bank of vs. Tata Investment
Performance |
| Timeline |
| State Bank |
| Tata Investment |
State Bank and Tata Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and Tata Investment
The main advantage of trading using opposite State Bank and Tata Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Tata Investment 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 Tata Investment will offset losses from the drop in Tata Investment's long position.| State Bank vs. Medplus Health Services | State Bank vs. Unitech Limited | State Bank vs. Sakar Healthcare Limited | State Bank vs. Zydus Wellness Limited |
| Tata Investment vs. Nahar Industrial Enterprises | Tata Investment vs. Arrow Greentech Limited | Tata Investment vs. Adroit Infotech Limited | Tata Investment vs. NRB Industrial Bearings |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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