Correlation Between State Bank and IRONBARK ZINC

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

Diversification Opportunities for State Bank and IRONBARK ZINC

-0.24

Correlation Coefficient

State Bank  IRONBARK ZINC

Very good diversification

The 3 months correlation between State and IRONBARK is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding State Bank of and IRONBARK ZINC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IRONBARK ZINC 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 IRONBARK ZINC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IRONBARK ZINC has no effect on the direction of State Bank i.e., State Bank and IRONBARK ZINC go up and down completely randomly.

Pair Corralation between State Bank and IRONBARK ZINC

If you would invest  0.10  in IRONBARK ZINC on September 30, 2024 and sell it today you would earn a total of  0.00  from holding IRONBARK ZINC or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	63.16%
Values	Daily Returns

State Bank of  vs.  IRONBARK ZINC

State Bank

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in State Bank of are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, State Bank may actually be approaching a critical reversion point that can send shares even higher in January 2025.

IRONBARK ZINC

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days IRONBARK ZINC has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather uncertain basic indicators, IRONBARK ZINC exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with State Bank and IRONBARK ZINC

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

The idea behind State Bank of and IRONBARK ZINC 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.