Correlation Between Globrands and Kerur Holdings

Can any of the company-specific risk be diversified away by investing in both Globrands and Kerur Holdings 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 Globrands and Kerur Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Globrands Group and Kerur Holdings, you can compare the effects of market volatilities on Globrands and Kerur Holdings 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 Globrands with a short position of Kerur Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Globrands and Kerur Holdings.

Diversification Opportunities for Globrands and Kerur Holdings

0.96

Correlation Coefficient

Globrands  Kerur Holdings

Almost no diversification

The 3 months correlation between Globrands and Kerur is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Globrands Group and Kerur Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kerur Holdings and Globrands 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 Globrands Group are associated (or correlated) with Kerur Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kerur Holdings has no effect on the direction of Globrands i.e., Globrands and Kerur Holdings go up and down completely randomly.

Pair Corralation between Globrands and Kerur Holdings

Assuming the 90 days trading horizon Globrands Group is expected to generate 1.0 times more return on investment than Kerur Holdings. However, Globrands Group is 1.0 times less risky than Kerur Holdings. It trades about 0.08 of its potential returns per unit of risk. Kerur Holdings is currently generating about 0.03 per unit of risk. If you would invest  2,945,280  in Globrands Group on September 14, 2024 and sell it today you would earn a total of  1,756,720  from holding Globrands Group or generate 59.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Globrands Group  vs.  Kerur Holdings

Globrands Group

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Globrands Group are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Globrands sustained solid returns over the last few months and may actually be approaching a breakup point.

Kerur Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kerur Holdings are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kerur Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Globrands and Kerur Holdings

The main advantage of trading using opposite Globrands and Kerur Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Globrands position performs unexpectedly, Kerur Holdings 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 Kerur Holdings will offset losses from the drop in Kerur Holdings' long position.

The idea behind Globrands Group and Kerur Holdings pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.