Correlation Between Edelweiss Financial and Punjab National
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By analyzing existing cross correlation between Edelweiss Financial Services and Punjab National Bank, you can compare the effects of market volatilities on Edelweiss Financial and Punjab National 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 Edelweiss Financial with a short position of Punjab National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Edelweiss Financial and Punjab National.
Diversification Opportunities for Edelweiss Financial and Punjab National
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Edelweiss and Punjab is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Edelweiss Financial Services and Punjab National Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab National Bank and Edelweiss Financial 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 Edelweiss Financial Services are associated (or correlated) with Punjab National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab National Bank has no effect on the direction of Edelweiss Financial i.e., Edelweiss Financial and Punjab National go up and down completely randomly.
Pair Corralation between Edelweiss Financial and Punjab National
Assuming the 90 days trading horizon Edelweiss Financial Services is expected to generate 1.68 times more return on investment than Punjab National. However, Edelweiss Financial is 1.68 times more volatile than Punjab National Bank. It trades about -0.02 of its potential returns per unit of risk. Punjab National Bank is currently generating about -0.03 per unit of risk. If you would invest 13,551 in Edelweiss Financial Services on September 26, 2024 and sell it today you would lose (978.00) from holding Edelweiss Financial Services or give up 7.22% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 98.39% |
Values | Daily Returns |
Edelweiss Financial Services vs. Punjab National Bank
Performance |
Timeline |
Edelweiss Financial |
Punjab National Bank |
Edelweiss Financial and Punjab National Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Edelweiss Financial and Punjab National
The main advantage of trading using opposite Edelweiss Financial and Punjab National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Edelweiss Financial position performs unexpectedly, Punjab National 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 Punjab National will offset losses from the drop in Punjab National's long position.Edelweiss Financial vs. IDBI Bank Limited | Edelweiss Financial vs. UCO Bank | Edelweiss Financial vs. Shree Pushkar Chemicals | Edelweiss Financial vs. IG Petrochemicals Limited |
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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.
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