Correlation Between State Bank and Gokul Refoils

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

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

Diversification Opportunities for State Bank and Gokul Refoils

0.36

Correlation Coefficient

State Bank  Gokul Refoils

Weak diversification

The 3 months correlation between State and Gokul is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Gokul Refoils and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gokul Refoils 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 Gokul Refoils. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gokul Refoils has no effect on the direction of State Bank i.e., State Bank and Gokul Refoils go up and down completely randomly.

Pair Corralation between State Bank and Gokul Refoils

Assuming the 90 days trading horizon State Bank of is expected to under-perform the Gokul Refoils. But the stock apears to be less risky and, when comparing its historical volatility, State Bank of is 1.91 times less risky than Gokul Refoils. The stock trades about -0.05 of its potential returns per unit of risk. The Gokul Refoils and is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest  4,238  in Gokul Refoils and on October 13, 2024 and sell it today you would earn a total of  1,871  from holding Gokul Refoils and or generate 44.15% return on investment over 90 days.

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

State Bank of  vs.  Gokul Refoils and

State Bank

Risk-Adjusted Performance

0 of 100

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 unfluctuating 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.

Gokul Refoils

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with State Bank and Gokul Refoils

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

The idea behind State Bank of and Gokul Refoils and 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.