Correlation Between HDFC Bank and Ameris Bancorp

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

Diversification Opportunities for HDFC Bank and Ameris Bancorp

0.61
  Correlation Coefficient

Poor diversification

The 3 months correlation between HDFC Bank and Ameris is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding HDFC Bank Limited and Ameris Bancorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ameris Bancorp and HDFC 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 HDFC Bank Limited are associated (or correlated) with Ameris Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ameris Bancorp has no effect on the direction of HDFC Bank i.e., HDFC Bank and Ameris Bancorp go up and down completely randomly.

Pair Corralation between HDFC Bank and Ameris Bancorp

Considering the 90-day investment horizon HDFC Bank Limited is expected to generate 0.89 times more return on investment than Ameris Bancorp. However, HDFC Bank Limited is 1.13 times less risky than Ameris Bancorp. It trades about 0.32 of its potential returns per unit of risk. Ameris Bancorp is currently generating about 0.1 per unit of risk. If you would invest  6,141  in HDFC Bank Limited on September 3, 2022 and sell it today you would earn a total of  679.00  from holding HDFC Bank Limited or generate 11.06% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

HDFC Bank Limited  vs.  Ameris Bancorp

 Performance (%) 
       Timeline  
HDFC Bank Limited 
HDFC Bank Performance
7 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in HDFC Bank Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady fundamental indicators, HDFC Bank may actually be approaching a critical reversion point that can send shares even higher in January 2023.

HDFC Bank Price Channel

Ameris Bancorp 
Ameris Performance
11 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Ameris Bancorp are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Ameris Bancorp sustained solid returns over the last few months and may actually be approaching a breakup point.

Ameris Price Channel

HDFC Bank and Ameris Bancorp Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with HDFC Bank and Ameris Bancorp

The main advantage of trading using opposite HDFC Bank and Ameris Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HDFC Bank position performs unexpectedly, Ameris Bancorp 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 Ameris Bancorp will offset losses from the drop in Ameris Bancorp's long position.
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The idea behind HDFC Bank Limited and Ameris Bancorp 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.
Ameris Bancorp vs. VANGUARD SMALL-CAP GROWTH
Ameris Bancorp vs. GROWTH FUND OF
Ameris Bancorp vs. Linde PLC
Check out your portfolio center. 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.

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