Correlation Between MIC Electronics and Kalyani Investment
Can any of the company-specific risk be diversified away by investing in both MIC Electronics and Kalyani Investment 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 MIC Electronics and Kalyani Investment into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIC Electronics Limited and Kalyani Investment, you can compare the effects of market volatilities on MIC Electronics and Kalyani Investment 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 MIC Electronics with a short position of Kalyani Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIC Electronics and Kalyani Investment.
Diversification Opportunities for MIC Electronics and Kalyani Investment
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between MIC and Kalyani is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding MIC Electronics Limited and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and MIC Electronics 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 MIC Electronics Limited are associated (or correlated) with Kalyani Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Investment has no effect on the direction of MIC Electronics i.e., MIC Electronics and Kalyani Investment go up and down completely randomly.
Pair Corralation between MIC Electronics and Kalyani Investment
Assuming the 90 days trading horizon MIC Electronics Limited is expected to generate 1.72 times more return on investment than Kalyani Investment. However, MIC Electronics is 1.72 times more volatile than Kalyani Investment. It trades about -0.15 of its potential returns per unit of risk. Kalyani Investment is currently generating about -0.46 per unit of risk. If you would invest 7,100 in MIC Electronics Limited on November 29, 2024 and sell it today you would lose (1,021) from holding MIC Electronics Limited or give up 14.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
MIC Electronics Limited vs. Kalyani Investment
Performance |
| Timeline |
| MIC Electronics |
| Kalyani Investment |
MIC Electronics and Kalyani Investment Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIC Electronics and Kalyani Investment
The main advantage of trading using opposite MIC Electronics and Kalyani Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIC Electronics position performs unexpectedly, Kalyani Investment 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 Kalyani Investment will offset losses from the drop in Kalyani Investment's long position.| MIC Electronics vs. The Indian Hotels | MIC Electronics vs. Fertilizers and Chemicals | MIC Electronics vs. 21st Century Management | MIC Electronics vs. Chalet Hotels Limited |
| Kalyani Investment vs. PB Fintech Limited | Kalyani Investment vs. Jaypee Infratech Limited | Kalyani Investment vs. LT Technology Services | Kalyani Investment vs. Orient Technologies 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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