Correlation Between Kotak Mahindra and Rico Auto
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By analyzing existing cross correlation between Kotak Mahindra Bank and Rico Auto Industries, you can compare the effects of market volatilities on Kotak Mahindra and Rico Auto 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 Rico Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kotak Mahindra and Rico Auto.
Diversification Opportunities for Kotak Mahindra and Rico Auto
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between Kotak and Rico is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kotak Mahindra Bank and Rico Auto Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rico Auto Industries 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 Rico Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rico Auto Industries has no effect on the direction of Kotak Mahindra i.e., Kotak Mahindra and Rico Auto go up and down completely randomly.
Pair Corralation between Kotak Mahindra and Rico Auto
Assuming the 90 days trading horizon Kotak Mahindra Bank is expected to generate 0.82 times more return on investment than Rico Auto. However, Kotak Mahindra Bank is 1.22 times less risky than Rico Auto. It trades about 0.15 of its potential returns per unit of risk. Rico Auto Industries is currently generating about -0.12 per unit of risk. If you would invest 177,790 in Kotak Mahindra Bank on November 6, 2024 and sell it today you would earn a total of 12,210 from holding Kotak Mahindra Bank or generate 6.87% 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. Rico Auto Industries
Performance |
| Timeline |
| Kotak Mahindra Bank |
| Rico Auto Industries |
Kotak Mahindra and Rico Auto Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kotak Mahindra and Rico Auto
The main advantage of trading using opposite Kotak Mahindra and Rico Auto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kotak Mahindra position performs unexpectedly, Rico Auto 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 Rico Auto will offset losses from the drop in Rico Auto's long position.| Kotak Mahindra vs. Nazara Technologies Limited | Kotak Mahindra vs. Sasken Technologies Limited | Kotak Mahindra vs. Rossari Biotech Limited | Kotak Mahindra vs. Cambridge Technology Enterprises |
| Rico Auto vs. Allied Blenders Distillers | Rico Auto vs. DCB Bank Limited | Rico Auto vs. Arman Financial Services | Rico Auto vs. Hybrid Financial Services |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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