Correlation Between HEG and Federal Bank
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By analyzing existing cross correlation between HEG Limited and The Federal Bank, you can compare the effects of market volatilities on HEG and Federal 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 HEG with a short position of Federal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of HEG and Federal Bank.
Diversification Opportunities for HEG and Federal Bank
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between HEG and Federal is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding HEG Limited and The Federal Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Federal Bank and HEG 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 HEG Limited are associated (or correlated) with Federal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Federal Bank has no effect on the direction of HEG i.e., HEG and Federal Bank go up and down completely randomly.
Pair Corralation between HEG and Federal Bank
Assuming the 90 days trading horizon HEG Limited is expected to generate 127.08 times more return on investment than Federal Bank. However, HEG is 127.08 times more volatile than The Federal Bank. It trades about 0.2 of its potential returns per unit of risk. The Federal Bank is currently generating about 0.06 per unit of risk. If you would invest 17,729 in HEG Limited on September 26, 2024 and sell it today you would earn a total of 35,366 from holding HEG Limited or generate 199.48% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 96.06% |
Values | Daily Returns |
HEG Limited vs. The Federal Bank
Performance |
Timeline |
HEG Limited |
Federal Bank |
HEG and Federal Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with HEG and Federal Bank
The main advantage of trading using opposite HEG and Federal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HEG position performs unexpectedly, Federal 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 Federal Bank will offset losses from the drop in Federal Bank's long position.HEG vs. The Federal Bank | HEG vs. DCM Financial Services | HEG vs. JM Financial Limited | HEG vs. Gujarat Lease Financing |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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