Correlation Between Kotak Mahindra and General Insurance
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By analyzing existing cross correlation between Kotak Mahindra Bank and General Insurance, you can compare the effects of market volatilities on Kotak Mahindra 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 Kotak Mahindra with a short position of General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and General Insurance.
Diversification Opportunities for Kotak Mahindra and General Insurance
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Kotak and General is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance 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 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 Kotak Mahindra i.e., Kotak Mahindra and General Insurance go up and down completely randomly.
Pair Corralation between Kotak Mahindra and General Insurance
Assuming the 90 days trading horizon Kotak Mahindra is expected to generate 9.64 times less return on investment than General Insurance. But when comparing it to its historical volatility, Kotak Mahindra Bank is 2.33 times less risky than General Insurance. It trades about 0.02 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 14,958 in General Insurance on November 1, 2024 and sell it today you would earn a total of 25,537 from holding General Insurance or generate 170.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Kotak Mahindra Bank vs. General Insurance
Performance |
| Timeline |
| Kotak Mahindra Bank |
| General Insurance |
Kotak Mahindra and General Insurance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and General Insurance
The main advantage of trading using opposite Kotak Mahindra and General Insurance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra 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.| Kotak Mahindra vs. LT Foods Limited | Kotak Mahindra vs. Teamlease Services Limited | Kotak Mahindra vs. Foods Inns Limited | Kotak Mahindra vs. Megastar Foods Limited |
| General Insurance vs. Kewal Kiran Clothing | General Insurance vs. NRB Industrial Bearings | General Insurance vs. Ratnamani Metals Tubes | General Insurance vs. AUTHUM INVESTMENT INFRASTRUCTU |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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