Correlation Between SBI Holdings and Gap

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

By analyzing existing cross correlation between SBI Holdings and The Gap, you can compare the effects of market volatilities on SBI Holdings and Gap 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 SBI Holdings with a short position of Gap. Check out your portfolio center. Please also check ongoing floating volatility patterns of SBI Holdings and Gap.

Diversification Opportunities for SBI Holdings and Gap

0.0

Correlation Coefficient

SBI Holdings  Gap

Pay attention - limited upside

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

Pair Corralation between SBI Holdings and Gap

If you would invest  0.00  in The Gap on October 9, 2024 and sell it today you would earn a total of  0.00  from holding The Gap or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	5.88%
Values	Daily Returns

SBI Holdings  vs.  The Gap

SBI Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in SBI Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, SBI Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Gap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Gap is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with SBI Holdings and Gap

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

The idea behind SBI Holdings and The Gap 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.