Correlation Between Consolidated Construction and Kewal Kiran
Can any of the company-specific risk be diversified away by investing in both Consolidated Construction and Kewal Kiran 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 Consolidated Construction and Kewal Kiran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Consolidated Construction Consortium and Kewal Kiran Clothing, you can compare the effects of market volatilities on Consolidated Construction and Kewal Kiran 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 Consolidated Construction with a short position of Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Consolidated Construction and Kewal Kiran.
Diversification Opportunities for Consolidated Construction and Kewal Kiran
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Consolidated and Kewal is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Consolidated Construction Cons and Kewal Kiran Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewal Kiran Clothing and Consolidated Construction 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 Consolidated Construction Consortium are associated (or correlated) with Kewal Kiran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewal Kiran Clothing has no effect on the direction of Consolidated Construction i.e., Consolidated Construction and Kewal Kiran go up and down completely randomly.
Pair Corralation between Consolidated Construction and Kewal Kiran
Assuming the 90 days trading horizon Consolidated Construction Consortium is expected to generate 18.53 times more return on investment than Kewal Kiran. However, Consolidated Construction is 18.53 times more volatile than Kewal Kiran Clothing. It trades about 0.06 of its potential returns per unit of risk. Kewal Kiran Clothing is currently generating about 0.04 per unit of risk. If you would invest 150.00 in Consolidated Construction Consortium on August 31, 2024 and sell it today you would earn a total of 1,713 from holding Consolidated Construction Consortium or generate 1142.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.18% |
| Values | Daily Returns |
Consolidated Construction Cons vs. Kewal Kiran Clothing
Performance |
| Timeline |
| Consolidated Construction |
| Kewal Kiran Clothing |
Consolidated Construction and Kewal Kiran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Consolidated Construction and Kewal Kiran
The main advantage of trading using opposite Consolidated Construction and Kewal Kiran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Consolidated Construction position performs unexpectedly, Kewal Kiran 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 Kewal Kiran will offset losses from the drop in Kewal Kiran's long position.| Consolidated Construction vs. Kingfa Science Technology | Consolidated Construction vs. GTL Limited | Consolidated Construction vs. Indo Amines Limited | Consolidated Construction vs. HDFC Mutual Fund |
| Kewal Kiran vs. Kingfa Science Technology | Kewal Kiran vs. GTL Limited | Kewal Kiran vs. Indo Amines Limited | Kewal Kiran vs. HDFC Mutual Fund |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
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