Correlation Between Cambridge Technology and Kalyani Steels
Can any of the company-specific risk be diversified away by investing in both Cambridge Technology and Kalyani Steels 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 Cambridge Technology and Kalyani Steels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cambridge Technology Enterprises and Kalyani Steels Limited, you can compare the effects of market volatilities on Cambridge Technology and Kalyani Steels 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 Cambridge Technology with a short position of Kalyani Steels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cambridge Technology and Kalyani Steels.
Diversification Opportunities for Cambridge Technology and Kalyani Steels
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Cambridge and Kalyani is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Cambridge Technology Enterpris and Kalyani Steels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Steels and Cambridge Technology 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 Cambridge Technology Enterprises are associated (or correlated) with Kalyani Steels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Steels has no effect on the direction of Cambridge Technology i.e., Cambridge Technology and Kalyani Steels go up and down completely randomly.
Pair Corralation between Cambridge Technology and Kalyani Steels
Assuming the 90 days trading horizon Cambridge Technology Enterprises is expected to generate 1.39 times more return on investment than Kalyani Steels. However, Cambridge Technology is 1.39 times more volatile than Kalyani Steels Limited. It trades about -0.29 of its potential returns per unit of risk. Kalyani Steels Limited is currently generating about -0.51 per unit of risk. If you would invest 10,509 in Cambridge Technology Enterprises on November 1, 2024 and sell it today you would lose (2,249) from holding Cambridge Technology Enterprises or give up 21.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cambridge Technology Enterpris vs. Kalyani Steels Limited
Performance |
| Timeline |
| Cambridge Technology |
| Kalyani Steels |
Cambridge Technology and Kalyani Steels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cambridge Technology and Kalyani Steels
The main advantage of trading using opposite Cambridge Technology and Kalyani Steels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cambridge Technology position performs unexpectedly, Kalyani Steels 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 Kalyani Steels will offset losses from the drop in Kalyani Steels' long position.| Cambridge Technology vs. Sanginita Chemicals Limited | Cambridge Technology vs. Ratnamani Metals Tubes | Cambridge Technology vs. Hilton Metal Forging | Cambridge Technology vs. IOL Chemicals and |
| Kalyani Steels vs. Kotak Mahindra Bank | Kalyani Steels vs. ideaForge Technology Limited | Kalyani Steels vs. Salzer Electronics Limited | Kalyani Steels vs. Cambridge Technology Enterprises |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios |