Correlation Between Kewal Kiran and Dow Jones
Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and Dow Jones 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 Kewal Kiran and Dow Jones into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kewal Kiran Clothing and Dow Jones Industrial, you can compare the effects of market volatilities on Kewal Kiran and Dow Jones 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 Dow Jones. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Dow Jones.
Diversification Opportunities for Kewal Kiran and Dow Jones
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kewal and Dow is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Dow Jones Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dow Jones Industrial 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 Dow Jones. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dow Jones Industrial has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Dow Jones go up and down completely randomly.
Pair Corralation between Kewal Kiran and Dow Jones
Assuming the 90 days trading horizon Kewal Kiran Clothing is expected to generate 2.78 times more return on investment than Dow Jones. However, Kewal Kiran is 2.78 times more volatile than Dow Jones Industrial. It trades about 0.04 of its potential returns per unit of risk. Dow Jones Industrial is currently generating about 0.12 per unit of risk. If you would invest 49,934 in Kewal Kiran Clothing on August 31, 2024 and sell it today you would earn a total of 13,256 from holding Kewal Kiran Clothing or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Kewal Kiran Clothing vs. Dow Jones Industrial
Performance |
| Timeline |
Kewal Kiran and Dow Jones Volatility Contrast
Predicted Return Density |
| Returns |
Kewal Kiran Clothing
Pair trading matchups for Kewal Kiran
Dow Jones Industrial
Pair trading matchups for Dow Jones
Pair Trading with Kewal Kiran and Dow Jones
The main advantage of trading using opposite Kewal Kiran and Dow Jones positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewal Kiran position performs unexpectedly, Dow Jones 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 Dow Jones will offset losses from the drop in Dow Jones' long position.| Kewal Kiran vs. Kingfa Science Technology | Kewal Kiran vs. GTL Limited | Kewal Kiran vs. Indo Amines Limited | Kewal Kiran vs. HDFC Mutual Fund |
| Dow Jones vs. Aerofoam Metals | Dow Jones vs. ACG Metals Limited | Dow Jones vs. China Clean Energy | Dow Jones vs. Fast Retailing Co |
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
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Transaction History View history of all your transactions and understand their impact on performance |