Correlation Between Shriram Finance and SBI Cards
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By analyzing existing cross correlation between Shriram Finance Limited and SBI Cards and, you can compare the effects of market volatilities on Shriram Finance and SBI Cards 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 Shriram Finance with a short position of SBI Cards. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shriram Finance and SBI Cards.
Diversification Opportunities for Shriram Finance and SBI Cards
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Shriram and SBI is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Shriram Finance Limited and SBI Cards and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SBI Cards and Shriram Finance 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 Shriram Finance Limited are associated (or correlated) with SBI Cards. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SBI Cards has no effect on the direction of Shriram Finance i.e., Shriram Finance and SBI Cards go up and down completely randomly.
Pair Corralation between Shriram Finance and SBI Cards
Assuming the 90 days trading horizon Shriram Finance Limited is expected to generate 1.66 times more return on investment than SBI Cards. However, Shriram Finance is 1.66 times more volatile than SBI Cards and. It trades about 0.09 of its potential returns per unit of risk. SBI Cards and is currently generating about -0.01 per unit of risk. If you would invest 201,360 in Shriram Finance Limited on September 4, 2024 and sell it today you would earn a total of 108,060 from holding Shriram Finance Limited or generate 53.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Shriram Finance Limited vs. SBI Cards and
Performance |
| Timeline |
| Shriram Finance |
| SBI Cards |
Shriram Finance and SBI Cards Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shriram Finance and SBI Cards
The main advantage of trading using opposite Shriram Finance and SBI Cards positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shriram Finance position performs unexpectedly, SBI Cards 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 SBI Cards will offset losses from the drop in SBI Cards' long position.| Shriram Finance vs. JGCHEMICALS LIMITED | Shriram Finance vs. UltraTech Cement Limited | Shriram Finance vs. Thirumalai Chemicals Limited | Shriram Finance vs. Palred Technologies Limited |
| SBI Cards vs. Teamlease Services Limited | SBI Cards vs. UTI Asset Management | SBI Cards vs. Welspun Investments and | SBI Cards vs. Avonmore Capital Management |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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