Correlation Between Kotak Mahindra and Centum Electronics
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By analyzing existing cross correlation between Kotak Mahindra Bank and Centum Electronics Limited, you can compare the effects of market volatilities on Kotak Mahindra and Centum Electronics 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 Kotak Mahindra with a short position of Centum Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and Centum Electronics.
Diversification Opportunities for Kotak Mahindra and Centum Electronics
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kotak and Centum is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and Centum Electronics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Centum Electronics and Kotak Mahindra 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 Kotak Mahindra Bank are associated (or correlated) with Centum Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Centum Electronics has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and Centum Electronics go up and down completely randomly.
Pair Corralation between Kotak Mahindra and Centum Electronics
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 0.77 times more return on investment than Centum Electronics. However, Kotak Mahindra Bank is 1.3 times less risky than Centum Electronics. It trades about 0.16 of its potential returns per unit of risk. Centum Electronics Limited is currently generating about -0.23 per unit of risk. If you would invest 177,065 in Kotak Mahindra Bank on November 8, 2024 and sell it today you would earn a total of 14,530 from holding Kotak Mahindra Bank or generate 8.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. Centum Electronics Limited
Performance |
| Timeline |
| Kotak Mahindra Bank |
| Centum Electronics |
Kotak Mahindra and Centum Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and Centum Electronics
The main advantage of trading using opposite Kotak Mahindra and Centum Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, Centum Electronics 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 Centum Electronics will offset losses from the drop in Centum Electronics' long position.| Kotak Mahindra vs. Tera Software Limited | Kotak Mahindra vs. Compucom Software Limited | Kotak Mahindra vs. Nucleus Software Exports | Kotak Mahindra vs. Vidhi Specialty Food |
| Centum Electronics vs. Ankit Metal Power | Centum Electronics vs. V2 Retail Limited | Centum Electronics vs. Hilton Metal Forging | Centum Electronics vs. Rajnandini Metal 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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