Correlation Between Sonata Software and Kewal Kiran
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By analyzing existing cross correlation between Sonata Software Limited and Kewal Kiran Clothing, you can compare the effects of market volatilities on Sonata Software 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 Sonata Software with a short position of Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sonata Software and Kewal Kiran.
Diversification Opportunities for Sonata Software and Kewal Kiran
0.29 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Sonata and Kewal is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Sonata Software Limited 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 Sonata Software 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 Sonata Software Limited 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 Sonata Software i.e., Sonata Software and Kewal Kiran go up and down completely randomly.
Pair Corralation between Sonata Software and Kewal Kiran
Assuming the 90 days trading horizon Sonata Software Limited is expected to generate 1.64 times more return on investment than Kewal Kiran. However, Sonata Software is 1.64 times more volatile than Kewal Kiran Clothing. It trades about 0.01 of its potential returns per unit of risk. Kewal Kiran Clothing is currently generating about -0.09 per unit of risk. If you would invest 63,200 in Sonata Software Limited on August 30, 2024 and sell it today you would lose (380.00) from holding Sonata Software Limited or give up 0.6% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 97.62% |
| Values | Daily Returns |
Sonata Software Limited vs. Kewal Kiran Clothing
Performance |
| Timeline |
| Sonata Software |
| Kewal Kiran Clothing |
Sonata Software and Kewal Kiran Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sonata Software and Kewal Kiran
The main advantage of trading using opposite Sonata Software and Kewal Kiran positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sonata Software 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.| Sonata Software vs. JSW Holdings Limited | Sonata Software vs. Nalwa Sons Investments | Sonata Software vs. Kalyani Investment | Sonata Software vs. Pilani Investment and |
| Kewal Kiran vs. Indian Railway Finance | Kewal Kiran vs. Cholamandalam Financial Holdings | Kewal Kiran vs. Reliance Industries Limited | Kewal Kiran vs. Tata Consultancy Services |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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