Correlation Between State Bank and LT Technology
Can any of the company-specific risk be diversified away by investing in both State Bank and LT Technology 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 LT Technology 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 LT Technology Services, you can compare the effects of market volatilities on State Bank and LT Technology 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 LT Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and LT Technology.
Diversification Opportunities for State Bank and LT Technology
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between State and LTTS is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and LT Technology Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LT Technology Services 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 LT Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LT Technology Services has no effect on the direction of State Bank i.e., State Bank and LT Technology go up and down completely randomly.
Pair Corralation between State Bank and LT Technology
Assuming the 90 days trading horizon State Bank of is expected to generate 1.08 times more return on investment than LT Technology. However, State Bank is 1.08 times more volatile than LT Technology Services. It trades about 0.07 of its potential returns per unit of risk. LT Technology Services is currently generating about -0.01 per unit of risk. If you would invest 63,111 in State Bank of on September 24, 2024 and sell it today you would earn a total of 18,089 from holding State Bank of or generate 28.66% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 99.18% |
Values | Daily Returns |
State Bank of vs. LT Technology Services
Performance |
Timeline |
State Bank |
LT Technology Services |
State Bank and LT Technology Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and LT Technology
The main advantage of trading using opposite State Bank and LT Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, LT Technology 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 LT Technology will offset losses from the drop in LT Technology's long position.State Bank vs. TECIL Chemicals and | State Bank vs. HDFC Life Insurance | State Bank vs. Chembond Chemicals | State Bank vs. Tata Chemicals Limited |
LT Technology vs. State Bank of | LT Technology vs. Life Insurance | LT Technology vs. HDFC Bank Limited | LT Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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