Correlation Between State Bank and Muthoot Finance
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By analyzing existing cross correlation between State Bank of and Muthoot Finance Limited, you can compare the effects of market volatilities on State Bank and Muthoot Finance 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 Muthoot Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Muthoot Finance.
Diversification Opportunities for State Bank and Muthoot Finance
-0.46 | Correlation Coefficient |
Very good diversification
The 3 months correlation between State and Muthoot is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Muthoot Finance Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Muthoot Finance 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 Muthoot Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Muthoot Finance has no effect on the direction of State Bank i.e., State Bank and Muthoot Finance go up and down completely randomly.
Pair Corralation between State Bank and Muthoot Finance
Assuming the 90 days trading horizon State Bank of is expected to under-perform the Muthoot Finance. But the stock apears to be less risky and, when comparing its historical volatility, State Bank of is 1.06 times less risky than Muthoot Finance. The stock trades about -0.05 of its potential returns per unit of risk. The Muthoot Finance Limited is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 192,610 in Muthoot Finance Limited on October 27, 2024 and sell it today you would earn a total of 24,730 from holding Muthoot Finance Limited or generate 12.84% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
State Bank of vs. Muthoot Finance Limited
Performance |
Timeline |
State Bank |
Muthoot Finance |
State Bank and Muthoot Finance Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and Muthoot Finance
The main advantage of trading using opposite State Bank and Muthoot Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Muthoot Finance 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 Muthoot Finance will offset losses from the drop in Muthoot Finance's long position.State Bank vs. Kaushalya Infrastructure Development | ||
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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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