Correlation Between Kewal Kiran and AVALON TECHNOLOGIES
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By analyzing existing cross correlation between Kewal Kiran Clothing and AVALON TECHNOLOGIES LTD, you can compare the effects of market volatilities on Kewal Kiran and AVALON TECHNOLOGIES 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 Kewal Kiran with a short position of AVALON TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and AVALON TECHNOLOGIES.
Diversification Opportunities for Kewal Kiran and AVALON TECHNOLOGIES
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kewal and AVALON is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and AVALON TECHNOLOGIES LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AVALON TECHNOLOGIES LTD and Kewal Kiran 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 Kewal Kiran Clothing are associated (or correlated) with AVALON TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AVALON TECHNOLOGIES LTD has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and AVALON TECHNOLOGIES go up and down completely randomly.
Pair Corralation between Kewal Kiran and AVALON TECHNOLOGIES
Assuming the 90 days trading horizon Kewal Kiran Clothing is expected to under-perform the AVALON TECHNOLOGIES. But the stock apears to be less risky and, when comparing its historical volatility, Kewal Kiran Clothing is 1.34 times less risky than AVALON TECHNOLOGIES. The stock trades about -0.09 of its potential returns per unit of risk. The AVALON TECHNOLOGIES LTD is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 64,210 in AVALON TECHNOLOGIES LTD on November 28, 2024 and sell it today you would earn a total of 5,460 from holding AVALON TECHNOLOGIES LTD or generate 8.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kewal Kiran Clothing vs. AVALON TECHNOLOGIES LTD
Performance |
| Timeline |
| Kewal Kiran Clothing |
| AVALON TECHNOLOGIES LTD |
Kewal Kiran and AVALON TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kewal Kiran and AVALON TECHNOLOGIES
The main advantage of trading using opposite Kewal Kiran and AVALON TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewal Kiran position performs unexpectedly, AVALON TECHNOLOGIES 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 AVALON TECHNOLOGIES will offset losses from the drop in AVALON TECHNOLOGIES's long position.| Kewal Kiran vs. DJ Mediaprint Logistics | Kewal Kiran vs. Reliance Communications Limited | Kewal Kiran vs. Future Retail Limited | Kewal Kiran vs. Spencers Retail Limited |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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