Correlation Between TRUST BANK and SAMBA FOODS
Can any of the company-specific risk be diversified away by investing in both TRUST BANK and SAMBA FOODS 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 TRUST BANK and SAMBA FOODS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRUST BANK LIMITED and SAMBA FOODS LIMITED, you can compare the effects of market volatilities on TRUST BANK and SAMBA FOODS 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 TRUST BANK with a short position of SAMBA FOODS. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRUST BANK and SAMBA FOODS.
Diversification Opportunities for TRUST BANK and SAMBA FOODS
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between TRUST and SAMBA is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding TRUST BANK LIMITED and SAMBA FOODS LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SAMBA FOODS LIMITED and TRUST 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 TRUST BANK LIMITED are associated (or correlated) with SAMBA FOODS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SAMBA FOODS LIMITED has no effect on the direction of TRUST BANK i.e., TRUST BANK and SAMBA FOODS go up and down completely randomly.
Pair Corralation between TRUST BANK and SAMBA FOODS
If you would invest 55.00 in SAMBA FOODS LIMITED on September 2, 2024 and sell it today you would earn a total of 0.00 from holding SAMBA FOODS LIMITED or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRUST BANK LIMITED vs. SAMBA FOODS LIMITED
Performance |
| Timeline |
| TRUST BANK LIMITED |
| SAMBA FOODS LIMITED |
TRUST BANK and SAMBA FOODS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRUST BANK and SAMBA FOODS
The main advantage of trading using opposite TRUST BANK and SAMBA FOODS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRUST BANK position performs unexpectedly, SAMBA FOODS 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 SAMBA FOODS will offset losses from the drop in SAMBA FOODS's long position.The idea behind TRUST BANK LIMITED and SAMBA FOODS LIMITED pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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