Correlation Between Yes Bank and Mindteck

Can any of the company-specific risk be diversified away by investing in both Yes Bank and Mindteck 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 Yes Bank and Mindteck into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yes Bank Limited and Mindteck Limited, you can compare the effects of market volatilities on Yes Bank and Mindteck 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 Yes Bank with a short position of Mindteck. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Bank and Mindteck.

Diversification Opportunities for Yes Bank and Mindteck

0.74

Correlation Coefficient

Yes Bank  Mindteck

Poor diversification

The 3 months correlation between Yes and Mindteck is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yes Bank Limited and Mindteck Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mindteck Limited and Yes 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 Yes Bank Limited are associated (or correlated) with Mindteck. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mindteck Limited has no effect on the direction of Yes Bank i.e., Yes Bank and Mindteck go up and down completely randomly.

Pair Corralation between Yes Bank and Mindteck

Assuming the 90 days trading horizon Yes Bank Limited is expected to generate 0.5 times more return on investment than Mindteck. However, Yes Bank Limited is 2.0 times less risky than Mindteck. It trades about -0.08 of its potential returns per unit of risk. Mindteck Limited is currently generating about -0.05 per unit of risk. If you would invest  2,340  in Yes Bank Limited on September 17, 2024 and sell it today you would lose (231.00) from holding Yes Bank Limited or give up 9.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Yes Bank Limited  vs.  Mindteck Limited

Yes Bank Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yes Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Mindteck Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mindteck Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Yes Bank and Mindteck

The main advantage of trading using opposite Yes Bank and Mindteck positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yes Bank position performs unexpectedly, Mindteck 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 Mindteck will offset losses from the drop in Mindteck's long position.

The idea behind Yes Bank Limited and Mindteck Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.