Correlation Between KEC International and Max Financial
Can any of the company-specific risk be diversified away by investing in both KEC International and Max Financial 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 KEC International and Max Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KEC International Limited and Max Financial Services, you can compare the effects of market volatilities on KEC International and Max Financial 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 KEC International with a short position of Max Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of KEC International and Max Financial.
Diversification Opportunities for KEC International and Max Financial
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between KEC and Max is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding KEC International Limited and Max Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Max Financial Services and KEC International 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 KEC International Limited are associated (or correlated) with Max Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Max Financial Services has no effect on the direction of KEC International i.e., KEC International and Max Financial go up and down completely randomly.
Pair Corralation between KEC International and Max Financial
Assuming the 90 days trading horizon KEC International Limited is expected to generate 1.75 times more return on investment than Max Financial. However, KEC International is 1.75 times more volatile than Max Financial Services. It trades about 0.2 of its potential returns per unit of risk. Max Financial Services is currently generating about -0.26 per unit of risk. If you would invest 89,505 in KEC International Limited on August 26, 2024 and sell it today you would earn a total of 10,415 from holding KEC International Limited or generate 11.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
KEC International Limited vs. Max Financial Services
Performance |
Timeline |
KEC International |
Max Financial Services |
KEC International and Max Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with KEC International and Max Financial
The main advantage of trading using opposite KEC International and Max Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEC International position performs unexpectedly, Max Financial 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 Max Financial will offset losses from the drop in Max Financial's long position.KEC International vs. Pritish Nandy Communications | KEC International vs. Hybrid Financial Services | KEC International vs. One 97 Communications | KEC International vs. State Bank of |
Max Financial vs. Gangotri Textiles Limited | Max Financial vs. Hemisphere Properties India | Max Financial vs. Kingfa Science Technology | Max Financial vs. Rico Auto Industries |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
Other Complementary Tools
Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
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 | |
Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
CEOs Directory Screen CEOs from public companies around the world |