Correlation Between Centum Electronics and KNR Constructions
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By analyzing existing cross correlation between Centum Electronics Limited and KNR Constructions Limited, you can compare the effects of market volatilities on Centum Electronics and KNR Constructions 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 Centum Electronics with a short position of KNR Constructions. Check out your portfolio center. Please also check ongoing floating volatility patterns of Centum Electronics and KNR Constructions.
Diversification Opportunities for Centum Electronics and KNR Constructions
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Centum and KNR is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Centum Electronics Limited and KNR Constructions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNR Constructions and Centum Electronics 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 Centum Electronics Limited are associated (or correlated) with KNR Constructions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNR Constructions has no effect on the direction of Centum Electronics i.e., Centum Electronics and KNR Constructions go up and down completely randomly.
Pair Corralation between Centum Electronics and KNR Constructions
Assuming the 90 days trading horizon Centum Electronics Limited is expected to under-perform the KNR Constructions. In addition to that, Centum Electronics is 1.15 times more volatile than KNR Constructions Limited. It trades about -0.15 of its total potential returns per unit of risk. KNR Constructions Limited is currently generating about 0.23 per unit of volatility. If you would invest 29,065 in KNR Constructions Limited on August 30, 2024 and sell it today you would earn a total of 3,855 from holding KNR Constructions Limited or generate 13.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Centum Electronics Limited vs. KNR Constructions Limited
Performance |
| Timeline |
| Centum Electronics |
| KNR Constructions |
Centum Electronics and KNR Constructions Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Centum Electronics and KNR Constructions
The main advantage of trading using opposite Centum Electronics and KNR Constructions positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Centum Electronics position performs unexpectedly, KNR Constructions 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 KNR Constructions will offset losses from the drop in KNR Constructions' long position.| Centum Electronics vs. Reliance Industries Limited | Centum Electronics vs. Life Insurance | Centum Electronics vs. India Glycols Limited | Centum Electronics vs. Indo Borax Chemicals |
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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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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