Correlation Between State Bank and 3M India
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By analyzing existing cross correlation between State Bank of and 3M India Limited, you can compare the effects of market volatilities on State Bank and 3M India 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 State Bank with a short position of 3M India. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and 3M India.
Diversification Opportunities for State Bank and 3M India
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between State and 3MINDIA is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and 3M India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 3M India Limited and State Bank 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 State Bank of are associated (or correlated) with 3M India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 3M India Limited has no effect on the direction of State Bank i.e., State Bank and 3M India go up and down completely randomly.
Pair Corralation between State Bank and 3M India
Assuming the 90 days trading horizon State Bank of is expected to generate 1.04 times more return on investment than 3M India. However, State Bank is 1.04 times more volatile than 3M India Limited. It trades about -0.09 of its potential returns per unit of risk. 3M India Limited is currently generating about -0.17 per unit of risk. If you would invest 80,545 in State Bank of on October 16, 2024 and sell it today you would lose (7,595) from holding State Bank of or give up 9.43% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
State Bank of vs. 3M India Limited
Performance |
Timeline |
State Bank |
3M India Limited |
State Bank and 3M India Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and 3M India
The main advantage of trading using opposite State Bank and 3M India positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, 3M India 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 3M India will offset losses from the drop in 3M India's long position.State Bank vs. SBI Life Insurance | ||
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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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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