Correlation Between KNR Constructions and Consolidated Construction
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By analyzing existing cross correlation between KNR Constructions Limited and Consolidated Construction Consortium, you can compare the effects of market volatilities on KNR Constructions and Consolidated Construction 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 KNR Constructions with a short position of Consolidated Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNR Constructions and Consolidated Construction.
Diversification Opportunities for KNR Constructions and Consolidated Construction
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between KNR and Consolidated is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding KNR Constructions Limited and Consolidated Construction Cons in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Consolidated Construction and KNR Constructions 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 KNR Constructions Limited are associated (or correlated) with Consolidated Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Consolidated Construction has no effect on the direction of KNR Constructions i.e., KNR Constructions and Consolidated Construction go up and down completely randomly.
Pair Corralation between KNR Constructions and Consolidated Construction
Assuming the 90 days trading horizon KNR Constructions Limited is expected to generate 0.61 times more return on investment than Consolidated Construction. However, KNR Constructions Limited is 1.65 times less risky than Consolidated Construction. It trades about -0.43 of its potential returns per unit of risk. Consolidated Construction Consortium is currently generating about -0.29 per unit of risk. If you would invest 29,030 in KNR Constructions Limited on November 27, 2024 and sell it today you would lose (6,060) from holding KNR Constructions Limited or give up 20.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KNR Constructions Limited vs. Consolidated Construction Cons
Performance |
| Timeline |
| KNR Constructions |
| Consolidated Construction |
KNR Constructions and Consolidated Construction Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KNR Constructions and Consolidated Construction
The main advantage of trading using opposite KNR Constructions and Consolidated Construction positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KNR Constructions position performs unexpectedly, Consolidated Construction 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 Consolidated Construction will offset losses from the drop in Consolidated Construction's long position.| KNR Constructions vs. Arman Financial Services | KNR Constructions vs. CSB Bank Limited | KNR Constructions vs. Computer Age Management | KNR Constructions vs. 21st Century Management |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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