Correlation Between GTL and Kewal Kiran
Can any of the company-specific risk be diversified away by investing in both GTL 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 GTL and Kewal Kiran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GTL Limited and Kewal Kiran Clothing, you can compare the effects of market volatilities on GTL 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 GTL with a short position of Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTL and Kewal Kiran.
Diversification Opportunities for GTL and Kewal Kiran
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between GTL and Kewal is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding GTL Limited 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 GTL 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 GTL Limited 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 GTL i.e., GTL and Kewal Kiran go up and down completely randomly.
Pair Corralation between GTL and Kewal Kiran
Assuming the 90 days trading horizon GTL Limited is expected to generate 1.82 times more return on investment than Kewal Kiran. However, GTL is 1.82 times more volatile than Kewal Kiran Clothing. It trades about 0.04 of its potential returns per unit of risk. Kewal Kiran Clothing is currently generating about 0.02 per unit of risk. If you would invest 1,275 in GTL Limited on August 31, 2024 and sell it today you would earn a total of 22.00 from holding GTL Limited or generate 1.73% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GTL Limited vs. Kewal Kiran Clothing
Performance |
| Timeline |
| GTL Limited |
| Kewal Kiran Clothing |
GTL and Kewal Kiran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GTL and Kewal Kiran
The main advantage of trading using opposite GTL and Kewal Kiran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GTL 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.| GTL vs. UTI Asset Management | GTL vs. Reliance Communications Limited | GTL vs. Melstar Information Technologies | GTL vs. Hathway Cable Datacom |
| 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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