Correlation Between CU Medical and Kisan Telecom
Can any of the company-specific risk be diversified away by investing in both CU Medical and Kisan Telecom 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 CU Medical and Kisan Telecom into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CU Medical Systems and Kisan Telecom Co, you can compare the effects of market volatilities on CU Medical and Kisan Telecom 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 CU Medical with a short position of Kisan Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of CU Medical and Kisan Telecom.
Diversification Opportunities for CU Medical and Kisan Telecom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 115480 and Kisan is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding CU Medical Systems and Kisan Telecom Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kisan Telecom and CU Medical 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 CU Medical Systems are associated (or correlated) with Kisan Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kisan Telecom has no effect on the direction of CU Medical i.e., CU Medical and Kisan Telecom go up and down completely randomly.
Pair Corralation between CU Medical and Kisan Telecom
Assuming the 90 days trading horizon CU Medical Systems is expected to under-perform the Kisan Telecom. But the stock apears to be less risky and, when comparing its historical volatility, CU Medical Systems is 1.32 times less risky than Kisan Telecom. The stock trades about -0.06 of its potential returns per unit of risk. The Kisan Telecom Co is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 341,000 in Kisan Telecom Co on August 29, 2024 and sell it today you would lose (162,400) from holding Kisan Telecom Co or give up 47.62% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CU Medical Systems vs. Kisan Telecom Co
Performance |
| Timeline |
| CU Medical Systems |
| Kisan Telecom |
CU Medical and Kisan Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CU Medical and Kisan Telecom
The main advantage of trading using opposite CU Medical and Kisan Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CU Medical position performs unexpectedly, Kisan Telecom 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 Kisan Telecom will offset losses from the drop in Kisan Telecom's long position.| CU Medical vs. Samsung Electronics Co | CU Medical vs. Samsung Electronics Co | CU Medical vs. LG Energy Solution | CU Medical vs. SK Hynix |
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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 the Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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