Correlation Between State Bank and Salzer Electronics
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By analyzing existing cross correlation between State Bank of and Salzer Electronics Limited, you can compare the effects of market volatilities on State Bank and Salzer Electronics 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 Salzer Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and Salzer Electronics.
Diversification Opportunities for State Bank and Salzer Electronics
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between State and Salzer is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and Salzer Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salzer Electronics 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 Salzer Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salzer Electronics has no effect on the direction of State Bank i.e., State Bank and Salzer Electronics go up and down completely randomly.
Pair Corralation between State Bank and Salzer Electronics
Assuming the 90 days trading horizon State Bank is expected to generate 11.93 times less return on investment than Salzer Electronics. But when comparing it to its historical volatility, State Bank of is 2.01 times less risky than Salzer Electronics. It trades about 0.05 of its potential returns per unit of risk. Salzer Electronics Limited is currently generating about 0.31 of returns per unit of risk over similar time horizon. If you would invest 103,480 in Salzer Electronics Limited on September 23, 2024 and sell it today you would earn a total of 56,135 from holding Salzer Electronics Limited or generate 54.25% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
State Bank of vs. Salzer Electronics Limited
Performance |
Timeline |
State Bank |
Salzer Electronics |
State Bank and Salzer Electronics Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with State Bank and Salzer Electronics
The main advantage of trading using opposite State Bank and Salzer Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Bank position performs unexpectedly, Salzer Electronics 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 Salzer Electronics will offset losses from the drop in Salzer Electronics' long position.State Bank vs. Kingfa Science Technology | State Bank vs. Rico Auto Industries | State Bank vs. GACM Technologies Limited | State Bank vs. COSMO FIRST LIMITED |
Salzer Electronics vs. State Bank of | Salzer Electronics vs. Life Insurance | Salzer Electronics vs. HDFC Bank Limited | Salzer Electronics 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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