Ratio Trade - Long HDFC; short HDFC Bank: Emkay

Trade

• Watchlist
• Portfolio
• Message
• Set Alert

 

 

Choose Stock Exchange: BSE LIVE NSE LIVE

26 Aug, 2025 12:21

Volume

Todays L/H

More

×

Alternative research report by Emkay

Strategy"Buy HDFC (HDFC.IS) @ 1127-1129 and Sell HDFC Bank (HDFCB.IS) @ 969-971 in anticipation of a reversion in the price ratio. The current price ratio is 1.1629 and the target price ratio is 1.2792. We recommend holding positions with a stop loss placed at 1.1047 on a closing basis. The strategy has to be a rupee neutral strategy."

"The chart (In the attached pdf) indicates the normalized spread prevailing between returns of HDFC vis-à-vis HDFC Bank in a one year data window. Since January 14, 2014, HDFC has surged by around 37% while HDFC Bank has increased by around 44%, resulting into a negative return spread of around 7%. Historically, in the last 1 year, the pair has shown convergence in the range of -13% to -10% on 4 occasions (as shown in chart below). The pair has already started converging in favor of HDFC as indicated by an increase in the spread to -7% from a low of -10%", says Emkay Global Financial Services research report.

For all recommendations, click here

Disclaimer: The views and investment tips expressed by investment experts/broking houses/rating agencies on moneycontrol.com are their own, and not that of the website or its management. Moneycontrol.com advises users to check with certified experts before taking any investment decisions.

Read More