Correlation Between SBI Holdings and BROADPEAK
Can any of the company-specific risk be diversified away by investing in both SBI Holdings and BROADPEAK 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 SBI Holdings and BROADPEAK into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SBI Holdings and BROADPEAK SA EO, you can compare the effects of market volatilities on SBI Holdings and BROADPEAK 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 SBI Holdings with a short position of BROADPEAK. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Holdings and BROADPEAK.
Diversification Opportunities for SBI Holdings and BROADPEAK
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between SBI and BROADPEAK is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding SBI Holdings and BROADPEAK SA EO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BROADPEAK SA EO and SBI Holdings 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 SBI Holdings are associated (or correlated) with BROADPEAK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BROADPEAK SA EO has no effect on the direction of SBI Holdings i.e., SBI Holdings and BROADPEAK go up and down completely randomly.
Pair Corralation between SBI Holdings and BROADPEAK
Assuming the 90 days trading horizon SBI Holdings is expected to generate 1.68 times more return on investment than BROADPEAK. However, SBI Holdings is 1.68 times more volatile than BROADPEAK SA EO. It trades about 0.13 of its potential returns per unit of risk. BROADPEAK SA EO is currently generating about -0.05 per unit of risk. If you would invest 2,380 in SBI Holdings on October 30, 2024 and sell it today you would earn a total of 100.00 from holding SBI Holdings or generate 4.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
SBI Holdings vs. BROADPEAK SA EO
Performance |
| Timeline |
| SBI Holdings |
| BROADPEAK SA EO |
SBI Holdings and BROADPEAK Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SBI Holdings and BROADPEAK
The main advantage of trading using opposite SBI Holdings and BROADPEAK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SBI Holdings position performs unexpectedly, BROADPEAK 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 BROADPEAK will offset losses from the drop in BROADPEAK's long position.| SBI Holdings vs. BRIT AMER TOBACCO | SBI Holdings vs. GEAR4MUSIC LS 10 | SBI Holdings vs. China BlueChemical | SBI Holdings vs. Shin Etsu Chemical Co |
| BROADPEAK vs. CHIBA BANK | BROADPEAK vs. Virtu Financial | BROADPEAK vs. Fevertree Drinks PLC | BROADPEAK vs. Synchrony Financial |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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