Correlation Between NSL Foods and KC Metalsheet
Can any of the company-specific risk be diversified away by investing in both NSL Foods and KC Metalsheet 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 NSL Foods and KC Metalsheet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NSL Foods Public and KC Metalsheet Public, you can compare the effects of market volatilities on NSL Foods and KC Metalsheet 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 NSL Foods with a short position of KC Metalsheet. Check out your portfolio center. Please also check ongoing floating volatility patterns of NSL Foods and KC Metalsheet.
Diversification Opportunities for NSL Foods and KC Metalsheet
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between NSL and KCM is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding NSL Foods Public and KC Metalsheet Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KC Metalsheet Public and NSL Foods 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 NSL Foods Public are associated (or correlated) with KC Metalsheet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KC Metalsheet Public has no effect on the direction of NSL Foods i.e., NSL Foods and KC Metalsheet go up and down completely randomly.
Pair Corralation between NSL Foods and KC Metalsheet
Assuming the 90 days trading horizon NSL Foods is expected to generate 18.19 times less return on investment than KC Metalsheet. But when comparing it to its historical volatility, NSL Foods Public is 20.38 times less risky than KC Metalsheet. It trades about 0.04 of its potential returns per unit of risk. KC Metalsheet Public is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 62.00 in KC Metalsheet Public on September 19, 2024 and sell it today you would lose (33.00) from holding KC Metalsheet Public or give up 53.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NSL Foods Public vs. KC Metalsheet Public
Performance |
| Timeline |
| NSL Foods Public |
| KC Metalsheet Public |
NSL Foods and KC Metalsheet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NSL Foods and KC Metalsheet
The main advantage of trading using opposite NSL Foods and KC Metalsheet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NSL Foods position performs unexpectedly, KC Metalsheet 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 KC Metalsheet will offset losses from the drop in KC Metalsheet's long position.| NSL Foods vs. Asia Metal Public | NSL Foods vs. PINTHONG INDUSTRIAL PARK | NSL Foods vs. Lohakit Metal Public | NSL Foods vs. Ingress Industrial Public |
| KC Metalsheet vs. Chewathai Public | KC Metalsheet vs. AIRA Factoring Public | KC Metalsheet vs. Cho Thavee Public | KC Metalsheet vs. G Capital Public |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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