Correlation Between Yes Bank and Centum Electronics
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By analyzing existing cross correlation between Yes Bank Limited and Centum Electronics Limited, you can compare the effects of market volatilities on Yes Bank and Centum Electronics 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 Yes Bank with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Bank and Centum Electronics.
Diversification Opportunities for Yes Bank and Centum Electronics
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yes and Centum is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yes Bank Limited and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and Yes 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 Yes Bank Limited are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of Yes Bank i.e., Yes Bank and Centum Electronics go up and down completely randomly.
Pair Corralation between Yes Bank and Centum Electronics
Assuming the 90 days trading horizon Yes Bank is expected to generate 2.8 times less return on investment than Centum Electronics. But when comparing it to its historical volatility, Yes Bank Limited is 2.59 times less risky than Centum Electronics. It trades about 0.18 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 165,835 in Centum Electronics Limited on September 13, 2024 and sell it today you would earn a total of 33,740 from holding Centum Electronics Limited or generate 20.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yes Bank Limited vs. Centum Electronics Limited
Performance |
| Timeline |
| Yes Bank Limited |
| Centum Electronics |
Yes Bank and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yes Bank and Centum Electronics
The main advantage of trading using opposite Yes Bank and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yes Bank position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| Yes Bank vs. Reliance Industries Limited | Yes Bank vs. State Bank of | Yes Bank vs. Oil Natural Gas | Yes Bank vs. ICICI Bank Limited |
| Centum Electronics vs. Vodafone Idea Limited | Centum Electronics vs. Yes Bank Limited | Centum Electronics vs. Indian Overseas Bank | Centum Electronics vs. Indian Oil |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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