Correlation Between Kewal Kiran and General Insurance
Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and General Insurance 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 General Insurance 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 General Insurance, you can compare the effects of market volatilities on Kewal Kiran and General Insurance 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 General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and General Insurance.
Diversification Opportunities for Kewal Kiran and General Insurance
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Kewal and General is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance 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 General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and General Insurance go up and down completely randomly.
Pair Corralation between Kewal Kiran and General Insurance
Assuming the 90 days trading horizon Kewal Kiran is expected to generate 4.49 times less return on investment than General Insurance. But when comparing it to its historical volatility, Kewal Kiran Clothing is 1.67 times less risky than General Insurance. It trades about 0.03 of its potential returns per unit of risk. General Insurance is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 15,501 in General Insurance on October 28, 2024 and sell it today you would earn a total of 26,534 from holding General Insurance or generate 171.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.39% |
| Values | Daily Returns |
Kewal Kiran Clothing vs. General Insurance
Performance |
| Timeline |
| Kewal Kiran Clothing |
| General Insurance |
Kewal Kiran and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kewal Kiran and General Insurance
The main advantage of trading using opposite Kewal Kiran and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewal Kiran position performs unexpectedly, General Insurance 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 General Insurance will offset losses from the drop in General Insurance's long position.| Kewal Kiran vs. Associated Alcohols Breweries | Kewal Kiran vs. Shivalik Bimetal Controls | Kewal Kiran vs. Styrenix Performance Materials | Kewal Kiran vs. LLOYDS METALS AND |
| General Insurance vs. State Bank of | General Insurance vs. Reliance Industries Limited | General Insurance vs. HDFC Bank Limited | General Insurance vs. Tata Motors Limited |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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