Correlation Between State Bank and TELE2 B
Can any of the company-specific risk be diversified away by investing in both State Bank and TELE2 B 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 TELE2 B 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 TELE2 B , you can compare the effects of market volatilities on State Bank and TELE2 B 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 TELE2 B. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and TELE2 B.
Diversification Opportunities for State Bank and TELE2 B
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and TELE2 is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and TELE2 B in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TELE2 B 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 TELE2 B. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TELE2 B has no effect on the direction of State Bank i.e., State Bank and TELE2 B go up and down completely randomly.
Pair Corralation between State Bank and TELE2 B
Assuming the 90 days horizon State Bank is expected to generate 3.24 times less return on investment than TELE2 B. But when comparing it to its historical volatility, State Bank of is 2.39 times less risky than TELE2 B. It trades about 0.08 of its potential returns per unit of risk. TELE2 B is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 269.00 in TELE2 B on September 19, 2024 and sell it today you would earn a total of 681.00 from holding TELE2 B or generate 253.16% 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. TELE2 B
Performance |
| Timeline |
| State Bank |
| TELE2 B |
State Bank and TELE2 B Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with State Bank and TELE2 B
The main advantage of trading using opposite State Bank and TELE2 B positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, TELE2 B 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 TELE2 B will offset losses from the drop in TELE2 B's long position.| State Bank vs. Gamma Communications plc | State Bank vs. Nufarm Limited | State Bank vs. Highlight Communications AG | State Bank vs. Daito Trust Construction |
| TELE2 B vs. DEVRY EDUCATION GRP | TELE2 B vs. American Public Education | TELE2 B vs. Corsair Gaming | TELE2 B vs. SEALED AIR |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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