Correlation Between Kalyani Steels and Selan Exploration
Can any of the company-specific risk be diversified away by investing in both Kalyani Steels and Selan Exploration 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 Kalyani Steels and Selan Exploration into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kalyani Steels Limited and Selan Exploration Technology, you can compare the effects of market volatilities on Kalyani Steels and Selan Exploration 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 Kalyani Steels with a short position of Selan Exploration. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Steels and Selan Exploration.
Diversification Opportunities for Kalyani Steels and Selan Exploration
0.12 | Correlation Coefficient |
Average diversification
The 3 months correlation between Kalyani and Selan is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Steels Limited and Selan Exploration Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Selan Exploration and Kalyani Steels 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 Kalyani Steels Limited are associated (or correlated) with Selan Exploration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Selan Exploration has no effect on the direction of Kalyani Steels i.e., Kalyani Steels and Selan Exploration go up and down completely randomly.
Pair Corralation between Kalyani Steels and Selan Exploration
Assuming the 90 days trading horizon Kalyani Steels Limited is expected to generate 2.21 times more return on investment than Selan Exploration. However, Kalyani Steels is 2.21 times more volatile than Selan Exploration Technology. It trades about 0.39 of its potential returns per unit of risk. Selan Exploration Technology is currently generating about -0.08 per unit of risk. If you would invest 80,695 in Kalyani Steels Limited on September 28, 2024 and sell it today you would earn a total of 34,020 from holding Kalyani Steels Limited or generate 42.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kalyani Steels Limited vs. Selan Exploration Technology
Performance |
| Timeline |
| Kalyani Steels |
| Selan Exploration |
Kalyani Steels and Selan Exploration Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kalyani Steels and Selan Exploration
The main advantage of trading using opposite Kalyani Steels and Selan Exploration positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kalyani Steels position performs unexpectedly, Selan Exploration 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 Selan Exploration will offset losses from the drop in Selan Exploration's long position.| Kalyani Steels vs. Baazar Style Retail | Kalyani Steels vs. V Mart Retail Limited | Kalyani Steels vs. Sarthak Metals Limited | Kalyani Steels vs. Silgo Retail Limited |
| Selan Exploration vs. One 97 Communications | Selan Exploration vs. Blue Coast Hotels | Selan Exploration vs. Coffee Day Enterprises | Selan Exploration vs. Kamat Hotels 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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