Correlation Between Bank Central and Sberbank

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Can any of the company-specific risk be diversified away by investing in both Bank Central and Sberbank 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 Bank Central and Sberbank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bank Central Asia and Sberbank Of Russia, you can compare the effects of market volatilities on Bank Central and Sberbank 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 Bank Central with a short position of Sberbank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bank Central and Sberbank.

Diversification Opportunities for Bank Central and Sberbank

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  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Bank Central and Sberbank

If you would invest  1,503  in Bank Central Asia on December 29, 2023 and sell it today you would earn a total of  117.00  from holding Bank Central Asia or generate 7.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Bank Central Asia  vs.  Sberbank Of Russia

 Performance 
       Timeline  
Bank Central Asia 

Risk-Adjusted Performance

7 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Bank Central Asia are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Bank Central may actually be approaching a critical reversion point that can send shares even higher in April 2024.
Sberbank Of Russia 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days Sberbank Of Russia has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong fundamental indicators, Sberbank is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Bank Central and Sberbank Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Bank Central and Sberbank

The main advantage of trading using opposite Bank Central and Sberbank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bank Central position performs unexpectedly, Sberbank 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 Sberbank will offset losses from the drop in Sberbank's long position.
The idea behind Bank Central Asia and Sberbank Of Russia 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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