Correlation Between KSB Pumps and ZAHIDJEE Textile
Can any of the company-specific risk be diversified away by investing in both KSB Pumps and ZAHIDJEE Textile 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 KSB Pumps and ZAHIDJEE Textile into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KSB Pumps and ZAHIDJEE Textile Mills, you can compare the effects of market volatilities on KSB Pumps and ZAHIDJEE Textile 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 KSB Pumps with a short position of ZAHIDJEE Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of KSB Pumps and ZAHIDJEE Textile.
Diversification Opportunities for KSB Pumps and ZAHIDJEE Textile
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between KSB and ZAHIDJEE is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding KSB Pumps and ZAHIDJEE Textile Mills in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZAHIDJEE Textile Mills and KSB Pumps 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 KSB Pumps are associated (or correlated) with ZAHIDJEE Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZAHIDJEE Textile Mills has no effect on the direction of KSB Pumps i.e., KSB Pumps and ZAHIDJEE Textile go up and down completely randomly.
Pair Corralation between KSB Pumps and ZAHIDJEE Textile
If you would invest 12,660 in KSB Pumps on September 4, 2024 and sell it today you would earn a total of 1,778 from holding KSB Pumps or generate 14.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 0.0% |
| Values | Daily Returns |
KSB Pumps vs. ZAHIDJEE Textile Mills
Performance |
| Timeline |
| KSB Pumps |
| ZAHIDJEE Textile Mills |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
KSB Pumps and ZAHIDJEE Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KSB Pumps and ZAHIDJEE Textile
The main advantage of trading using opposite KSB Pumps and ZAHIDJEE Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KSB Pumps position performs unexpectedly, ZAHIDJEE Textile 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 ZAHIDJEE Textile will offset losses from the drop in ZAHIDJEE Textile's long position.| KSB Pumps vs. Masood Textile Mills | KSB Pumps vs. Fauji Foods | KSB Pumps vs. Mari Petroleum | KSB Pumps vs. Loads |
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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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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