Correlation Between SANOFI S and State Bank
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By analyzing existing cross correlation between SANOFI S HEALTHC and State Bank of, you can compare the effects of market volatilities on SANOFI S 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 SANOFI S with a short position of State Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of SANOFI S and State Bank.
Diversification Opportunities for SANOFI S and State Bank
-0.35 | Correlation Coefficient |
Very good diversification
The 3 months correlation between SANOFI and State is -0.35. Overlapping area represents the amount of risk that can be diversified away by holding SANOFI S HEALTHC and State Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on State Bank and SANOFI S 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 SANOFI S HEALTHC 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 SANOFI S i.e., SANOFI S and State Bank go up and down completely randomly.
Pair Corralation between SANOFI S and State Bank
Assuming the 90 days trading horizon SANOFI S HEALTHC is expected to under-perform the State Bank. In addition to that, SANOFI S is 1.03 times more volatile than State Bank of. It trades about -0.01 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 79,085 in State Bank of on September 13, 2024 and sell it today you would earn a total of 7,075 from holding State Bank of or generate 8.95% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
SANOFI S HEALTHC vs. State Bank of
Performance |
Timeline |
SANOFI S HEALTHC |
State Bank |
SANOFI S and State Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with SANOFI S and State Bank
The main advantage of trading using opposite SANOFI S and State Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SANOFI S 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 SANOFI S HEALTHC 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.State Bank vs. Reliance Industries Limited | State Bank vs. Oil Natural Gas | State Bank vs. ICICI Bank Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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