Correlation Between CARSALES and State Bank
Can any of the company-specific risk be diversified away by investing in both CARSALES and State Bank 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 CARSALES and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and State Bank of, you can compare the effects of market volatilities on CARSALES 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 CARSALES with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and State Bank.
Diversification Opportunities for CARSALES and State Bank
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between CARSALES and State is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and CARSALES 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 CARSALESCOM 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 CARSALES i.e., CARSALES and State Bank go up and down completely randomly.
Pair Corralation between CARSALES and State Bank
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 0.64 times more return on investment than State Bank. However, CARSALESCOM is 1.55 times less risky than State Bank. It trades about 0.38 of its potential returns per unit of risk. State Bank of is currently generating about 0.09 per unit of risk. If you would invest 2,280 in CARSALESCOM on September 1, 2024 and sell it today you would earn a total of 280.00 from holding CARSALESCOM or generate 12.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. State Bank of
Performance |
| Timeline |
| CARSALESCOM |
| State Bank |
CARSALES and State Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and State Bank
The main advantage of trading using opposite CARSALES and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES 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.| CARSALES vs. CNVISION MEDIA | CARSALES vs. OURGAME INTHOLDL 00005 | CARSALES vs. Playa Hotels Resorts | CARSALES vs. Universal Entertainment |
| State Bank vs. Cars Inc | State Bank vs. SEI INVESTMENTS | State Bank vs. HK Electric Investments | State Bank vs. CARSALESCOM |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon |