Correlation Between Gujarat Lease and State Bank

Can any of the company-specific risk be diversified away by investing in both Gujarat Lease and State Bank 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 State Bank 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 State Bank of, you can compare the effects of market volatilities on Gujarat Lease and State 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 Gujarat Lease with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gujarat Lease and State Bank.

Diversification Opportunities for Gujarat Lease and State Bank

0.62

Correlation Coefficient

Gujarat Lease  State Bank

Poor diversification

The 3 months correlation between Gujarat and State is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Gujarat Lease Financing and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State 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 State Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of State Bank has no effect on the direction of Gujarat Lease i.e., Gujarat Lease and State Bank go up and down completely randomly.

Pair Corralation between Gujarat Lease and State Bank

Assuming the 90 days trading horizon Gujarat Lease Financing is expected to under-perform the State Bank. In addition to that, Gujarat Lease is 2.53 times more volatile than State Bank of. It trades about -0.29 of its total potential returns per unit of risk. State Bank of is currently generating about -0.1 per unit of volatility. If you would invest  82,115  in State Bank of on December 23, 2024 and sell it today you would lose (6,795) from holding State Bank of or give up 8.27% of portfolio value over 90 days.

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

Gujarat Lease Financing  vs.  State Bank of

Gujarat Lease Financing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gujarat Lease Financing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

State Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Gujarat Lease and State Bank

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

The idea behind Gujarat Lease Financing and State Bank of 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.