Correlation Between State Tradingof and Yes Bank

Can any of the company-specific risk be diversified away by investing in both State Tradingof and Yes Bank 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 Tradingof and Yes Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between The State Trading and Yes Bank Limited, you can compare the effects of market volatilities on State Tradingof and Yes Bank 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 Tradingof with a short position of Yes Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Tradingof and Yes Bank.

Diversification Opportunities for State Tradingof and Yes Bank

0.86

Correlation Coefficient

State Tradingof  Yes Bank

Very poor diversification

The 3 months correlation between State and Yes is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding The State Trading and Yes Bank Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yes Bank Limited and State Tradingof 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 The State Trading are associated (or correlated) with Yes Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yes Bank Limited has no effect on the direction of State Tradingof i.e., State Tradingof and Yes Bank go up and down completely randomly.

Pair Corralation between State Tradingof and Yes Bank

Assuming the 90 days trading horizon The State Trading is expected to generate 1.81 times more return on investment than Yes Bank. However, State Tradingof is 1.81 times more volatile than Yes Bank Limited. It trades about -0.05 of its potential returns per unit of risk. Yes Bank Limited is currently generating about -0.1 per unit of risk. If you would invest  15,005  in The State Trading on December 30, 2024 and sell it today you would lose (2,241) from holding The State Trading or give up 14.94% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

The State Trading  vs.  Yes Bank Limited

State Tradingof

Risk-Adjusted Performance

Very Weak

Over the last 90 days The State Trading has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's fundamental indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Yes Bank Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yes Bank Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with State Tradingof and Yes Bank

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

The idea behind The State Trading and Yes Bank Limited 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.