Correlation Between 3M India and Kilitch Drugs
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By analyzing existing cross correlation between 3M India Limited and Kilitch Drugs Limited, you can compare the effects of market volatilities on 3M India and Kilitch Drugs 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 3M India with a short position of Kilitch Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of 3M India and Kilitch Drugs.
Diversification Opportunities for 3M India and Kilitch Drugs
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 3MINDIA and Kilitch is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding 3M India Limited and Kilitch Drugs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilitch Drugs Limited and 3M India 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 3M India Limited are associated (or correlated) with Kilitch Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilitch Drugs Limited has no effect on the direction of 3M India i.e., 3M India and Kilitch Drugs go up and down completely randomly.
Pair Corralation between 3M India and Kilitch Drugs
Assuming the 90 days trading horizon 3M India Limited is expected to under-perform the Kilitch Drugs. But the stock apears to be less risky and, when comparing its historical volatility, 3M India Limited is 1.56 times less risky than Kilitch Drugs. The stock trades about -0.29 of its potential returns per unit of risk. The Kilitch Drugs Limited is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 32,070 in Kilitch Drugs Limited on September 2, 2024 and sell it today you would lose (510.00) from holding Kilitch Drugs Limited or give up 1.59% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
3M India Limited vs. Kilitch Drugs Limited
Performance |
| Timeline |
| 3M India Limited |
| Kilitch Drugs Limited |
3M India and Kilitch Drugs Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with 3M India and Kilitch Drugs
The main advantage of trading using opposite 3M India and Kilitch Drugs positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 3M India position performs unexpectedly, Kilitch Drugs 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 Kilitch Drugs will offset losses from the drop in Kilitch Drugs' long position.| 3M India vs. Reliance Industries Limited | 3M India vs. Oil Natural Gas | 3M India vs. ICICI Bank Limited | 3M India vs. Bharti Airtel Limited |
| Kilitch Drugs vs. MRF Limited | Kilitch Drugs vs. Bosch Limited | Kilitch Drugs vs. Bajaj Holdings Investment | Kilitch Drugs vs. Vardhman Holdings Limited |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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