Correlation Between Gujarat Lease and Punjab Sind

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

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

Diversification Opportunities for Gujarat Lease and Punjab Sind

0.37

Correlation Coefficient

Gujarat Lease  Punjab Sind

Weak diversification

The 3 months correlation between Gujarat and Punjab is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Lease Financing and Punjab Sind Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab Sind Bank and Gujarat Lease 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 Gujarat Lease Financing are associated (or correlated) with Punjab Sind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab Sind Bank has no effect on the direction of Gujarat Lease i.e., Gujarat Lease and Punjab Sind go up and down completely randomly.

Pair Corralation between Gujarat Lease and Punjab Sind

Assuming the 90 days trading horizon Gujarat Lease Financing is expected to under-perform the Punjab Sind. But the stock apears to be less risky and, when comparing its historical volatility, Gujarat Lease Financing is 1.23 times less risky than Punjab Sind. The stock trades about -0.56 of its potential returns per unit of risk. The Punjab Sind Bank is currently generating about -0.45 of returns per unit of risk over similar time horizon. If you would invest  5,403  in Punjab Sind Bank on October 9, 2024 and sell it today you would lose (671.00) from holding Punjab Sind Bank or give up 12.42% of portfolio value over 90 days.

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

Gujarat Lease Financing  vs.  Punjab Sind Bank

Gujarat Lease Financing

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Gujarat Lease Financing are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Gujarat Lease may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Punjab Sind Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Punjab Sind Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating 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 Gujarat Lease and Punjab Sind

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

The idea behind Gujarat Lease Financing and Punjab Sind Bank 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.