Correlation Between State Bank and Nippon Life
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By analyzing existing cross correlation between State Bank of and Nippon Life India, you can compare the effects of market volatilities on State Bank and Nippon Life 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 Nippon Life. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Nippon Life.
Diversification Opportunities for State Bank and Nippon Life
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Nippon is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Nippon Life India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nippon Life India 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 Nippon Life. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nippon Life India has no effect on the direction of State Bank i.e., State Bank and Nippon Life go up and down completely randomly.
Pair Corralation between State Bank and Nippon Life
Assuming the 90 days trading horizon State Bank is expected to generate 6.55 times less return on investment than Nippon Life. But when comparing it to its historical volatility, State Bank of is 1.66 times less risky than Nippon Life. It trades about 0.02 of its potential returns per unit of risk. Nippon Life India is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 64,429 in Nippon Life India on September 30, 2024 and sell it today you would earn a total of 8,696 from holding Nippon Life India or generate 13.5% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
State Bank of vs. Nippon Life India
Performance |
Timeline |
State Bank |
Nippon Life India |
State Bank and Nippon Life Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and Nippon Life
The main advantage of trading using opposite State Bank and Nippon Life positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Nippon Life 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 Nippon Life will offset losses from the drop in Nippon Life's long position.State Bank vs. Kingfa Science Technology | ||
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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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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