Correlation Between State Bank and Elin Electronics
Can any of the company-specific risk be diversified away by investing in both State Bank and Elin Electronics 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 State Bank and Elin Electronics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Bank of and Elin Electronics Limited, you can compare the effects of market volatilities on State Bank and Elin 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 State Bank with a short position of Elin Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Elin Electronics.
Diversification Opportunities for State Bank and Elin Electronics
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and Elin is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Elin Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elin Electronics and State 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 State Bank of are associated (or correlated) with Elin Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elin Electronics has no effect on the direction of State Bank i.e., State Bank and Elin Electronics go up and down completely randomly.
Pair Corralation between State Bank and Elin Electronics
Assuming the 90 days trading horizon State Bank of is expected to generate 0.57 times more return on investment than Elin Electronics. However, State Bank of is 1.74 times less risky than Elin Electronics. It trades about 0.04 of its potential returns per unit of risk. Elin Electronics Limited is currently generating about -0.08 per unit of risk. If you would invest 79,825 in State Bank of on September 24, 2024 and sell it today you would earn a total of 2,290 from holding State Bank of or generate 2.87% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 98.44% |
Values | Daily Returns |
State Bank of vs. Elin Electronics Limited
Performance |
Timeline |
State Bank |
Elin Electronics |
State Bank and Elin Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and Elin Electronics
The main advantage of trading using opposite State Bank and Elin Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Elin 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 Elin Electronics will offset losses from the drop in Elin Electronics' long position.State Bank vs. TECIL Chemicals and | State Bank vs. HDFC Life Insurance | State Bank vs. Chembond Chemicals | State Bank vs. Tata Chemicals Limited |
Elin Electronics vs. State Bank of | Elin Electronics vs. Life Insurance | Elin Electronics vs. HDFC Bank Limited | Elin Electronics vs. ICICI Bank Limited |
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 Stocks Directory module to find actively traded stocks across global markets.
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