Correlation Between Keynote Financial and State Bank

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Can any of the company-specific risk be diversified away by investing in both Keynote Financial 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 Keynote Financial and State Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Keynote Financial Services and State Bank of, you can compare the effects of market volatilities on Keynote Financial 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 Keynote Financial with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Keynote Financial and State Bank.

Diversification Opportunities for Keynote Financial and State Bank

KeynoteStateDiversified AwayKeynoteStateDiversified Away100%
0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between Keynote and State is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Keynote Financial Services and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and Keynote Financial 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 Keynote Financial Services 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 Keynote Financial i.e., Keynote Financial and State Bank go up and down completely randomly.

Pair Corralation between Keynote Financial and State Bank

Assuming the 90 days trading horizon Keynote Financial Services is expected to generate 2.91 times more return on investment than State Bank. However, Keynote Financial is 2.91 times more volatile than State Bank of. It trades about -0.04 of its potential returns per unit of risk. State Bank of is currently generating about -0.12 per unit of risk. If you would invest  24,345  in Keynote Financial Services on November 18, 2024 and sell it today you would lose (3,507) from holding Keynote Financial Services or give up 14.41% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Keynote Financial Services  vs.  State Bank of

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-15-10-50510
JavaScript chart by amCharts 3.21.15KEYFINSERV SBIN
       Timeline  
Keynote Financial 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Keynote Financial Services 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 stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb220240260280300320
State Bank 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
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 weak 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.
JavaScript chart by amCharts 3.21.15DecJanFebJanFeb720740760780800820840860880

Keynote Financial and State Bank Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-6.86-5.14-3.42-1.690.01.623.244.866.48 0.050.100.15
JavaScript chart by amCharts 3.21.15KEYFINSERV SBIN
       Returns  

Pair Trading with Keynote Financial and State Bank

The main advantage of trading using opposite Keynote Financial and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Keynote Financial 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 Keynote Financial Services 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.

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