Correlation Between Gokul Refoils and State Bank

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

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

Diversification Opportunities for Gokul Refoils and State Bank

0.73

Correlation Coefficient

Gokul Refoils  State Bank

Poor diversification

The 3 months correlation between Gokul and State is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Gokul Refoils 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 Gokul Refoils and 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 Gokul Refoils i.e., Gokul Refoils and State Bank go up and down completely randomly.

Pair Corralation between Gokul Refoils and State Bank

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 1.31 times more return on investment than State Bank. However, Gokul Refoils is 1.31 times more volatile than State Bank of. It trades about 0.15 of its potential returns per unit of risk. State Bank of is currently generating about 0.17 per unit of risk. If you would invest  5,873  in Gokul Refoils and on September 14, 2024 and sell it today you would earn a total of  364.00  from holding Gokul Refoils and or generate 6.2% return on investment over 90 days.

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

Gokul Refoils and  vs.  State Bank of

Gokul Refoils

Risk-Adjusted Performance

5 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

State Bank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in State Bank of are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, State Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Gokul Refoils and State Bank

The main advantage of trading using opposite Gokul Refoils and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gokul Refoils 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 Gokul Refoils and 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.

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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.