Correlation Between Shipping and Kewal Kiran
Can any of the company-specific risk be diversified away by investing in both Shipping and Kewal Kiran 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 Shipping and Kewal Kiran into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Shipping and Kewal Kiran Clothing, you can compare the effects of market volatilities on Shipping and Kewal Kiran 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 Shipping with a short position of Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shipping and Kewal Kiran.
Diversification Opportunities for Shipping and Kewal Kiran
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Shipping and Kewal is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Shipping and Kewal Kiran Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewal Kiran Clothing and Shipping 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 Shipping are associated (or correlated) with Kewal Kiran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewal Kiran Clothing has no effect on the direction of Shipping i.e., Shipping and Kewal Kiran go up and down completely randomly.
Pair Corralation between Shipping and Kewal Kiran
Assuming the 90 days trading horizon Shipping is expected to generate 1.79 times more return on investment than Kewal Kiran. However, Shipping is 1.79 times more volatile than Kewal Kiran Clothing. It trades about 0.05 of its potential returns per unit of risk. Kewal Kiran Clothing is currently generating about 0.03 per unit of risk. If you would invest 13,240 in Shipping on September 3, 2024 and sell it today you would earn a total of 10,247 from holding Shipping or generate 77.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.39% |
| Values | Daily Returns |
Shipping vs. Kewal Kiran Clothing
Performance |
| Timeline |
| Shipping |
| Kewal Kiran Clothing |
Shipping and Kewal Kiran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Shipping and Kewal Kiran
The main advantage of trading using opposite Shipping and Kewal Kiran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shipping position performs unexpectedly, Kewal Kiran 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 Kewal Kiran will offset losses from the drop in Kewal Kiran's long position.| Shipping vs. Sintex Plastics Technology | Shipping vs. Shyam Metalics and | Shipping vs. Hilton Metal Forging | Shipping vs. Sonata Software Limited |
| Kewal Kiran vs. Bajaj Holdings Investment | Kewal Kiran vs. Shipping | Kewal Kiran vs. Indo Borax Chemicals | Kewal Kiran vs. Kingfa Science Technology |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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