Correlation Between Sonata Software and State Bank
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By analyzing existing cross correlation between Sonata Software Limited and State Bank of, you can compare the effects of market volatilities on Sonata Software and State Bank 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 Sonata Software with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and State Bank.
Diversification Opportunities for Sonata Software and State Bank
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Sonata and State is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Sonata Software 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 Sonata Software Limited are associated (or correlated) with State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Sonata Software i.e., Sonata Software and State Bank go up and down completely randomly.
Pair Corralation between Sonata Software and State Bank
Assuming the 90 days trading horizon Sonata Software is expected to generate 2.01 times less return on investment than State Bank. In addition to that, Sonata Software is 1.54 times more volatile than State Bank of. It trades about 0.03 of its total potential returns per unit of risk. State Bank of is currently generating about 0.08 per unit of volatility. If you would invest 79,410 in State Bank of on September 3, 2024 and sell it today you would earn a total of 4,485 from holding State Bank of or generate 5.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sonata Software Limited vs. State Bank of
Performance |
| Timeline |
| Sonata Software |
| State Bank |
Sonata Software and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and State Bank
The main advantage of trading using opposite Sonata Software and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software position performs unexpectedly, State Bank 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 State Bank will offset losses from the drop in State Bank's long position.| Sonata Software vs. Consolidated Construction Consortium | Sonata Software vs. Biofil Chemicals Pharmaceuticals | Sonata Software vs. Shipping | Sonata Software vs. Indo Borax Chemicals |
| State Bank vs. Sonata Software Limited | State Bank vs. Sarveshwar Foods Limited | State Bank vs. Agro Tech Foods | State Bank vs. Tamilnadu Telecommunication 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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