Correlation Between State Bank and ZION OIL

Can any of the company-specific risk be diversified away by investing in both State Bank and ZION OIL 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 ZION OIL 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 ZION OIL GAS, you can compare the effects of market volatilities on State Bank and ZION OIL 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 ZION OIL. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Bank and ZION OIL.

Diversification Opportunities for State Bank and ZION OIL

0.0

Correlation Coefficient

State Bank  ZION OIL

Pay attention - limited upside

The 3 months correlation between State and ZION is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and ZION OIL GAS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZION OIL GAS 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 ZION OIL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZION OIL GAS has no effect on the direction of State Bank i.e., State Bank and ZION OIL go up and down completely randomly.

Pair Corralation between State Bank and ZION OIL

If you would invest  2.75  in ZION OIL GAS on December 2, 2024 and sell it today you would earn a total of  0.00  from holding ZION OIL GAS or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	95.45%
Values	Daily Returns

State Bank of  vs.  ZION OIL GAS

State Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days State Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

ZION OIL GAS

Risk-Adjusted Performance

Very Weak

Over the last 90 days ZION OIL GAS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, ZION OIL is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with State Bank and ZION OIL

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

The idea behind State Bank of and ZION OIL GAS 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.