Correlation Between Kewal Kiran and Selan Exploration
Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and Selan Exploration 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 Selan Exploration 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 Selan Exploration Technology, you can compare the effects of market volatilities on Kewal Kiran and Selan Exploration 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 Selan Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Selan Exploration.
Diversification Opportunities for Kewal Kiran and Selan Exploration
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kewal and Selan is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Selan Exploration Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selan Exploration 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 Selan Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selan Exploration has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Selan Exploration go up and down completely randomly.
Pair Corralation between Kewal Kiran and Selan Exploration
Assuming the 90 days trading horizon Kewal Kiran Clothing is expected to under-perform the Selan Exploration. But the stock apears to be less risky and, when comparing its historical volatility, Kewal Kiran Clothing is 1.74 times less risky than Selan Exploration. The stock trades about -0.09 of its potential returns per unit of risk. The Selan Exploration Technology is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 84,560 in Selan Exploration Technology on August 30, 2024 and sell it today you would earn a total of 565.00 from holding Selan Exploration Technology or generate 0.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kewal Kiran Clothing vs. Selan Exploration Technology
Performance |
| Timeline |
| Kewal Kiran Clothing |
| Selan Exploration |
Kewal Kiran and Selan Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kewal Kiran and Selan Exploration
The main advantage of trading using opposite Kewal Kiran and Selan Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewal Kiran position performs unexpectedly, Selan Exploration 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 Selan Exploration will offset losses from the drop in Selan Exploration's long position.| Kewal Kiran vs. Indian Railway Finance | Kewal Kiran vs. Cholamandalam Financial Holdings | Kewal Kiran vs. Reliance Industries Limited | Kewal Kiran vs. Tata Consultancy Services |
| Selan Exploration vs. Digjam Limited | Selan Exploration vs. Gujarat Raffia Industries | Selan Exploration vs. Piramal Enterprises Limited | Selan Exploration vs. PB Fintech 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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