Correlation Between G Tec and Kilitch Drugs

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

By analyzing existing cross correlation between G Tec Jainx Education and Kilitch Drugs Limited, you can compare the effects of market volatilities on G Tec and Kilitch Drugs 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 G Tec with a short position of Kilitch Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of G Tec and Kilitch Drugs.

Diversification Opportunities for G Tec and Kilitch Drugs

0.65

Correlation Coefficient

G Tec  Kilitch Drugs

Poor diversification

The 3 months correlation between GTECJAINX and Kilitch is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding G Tec Jainx Education and Kilitch Drugs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilitch Drugs Limited and G Tec 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 G Tec Jainx Education are associated (or correlated) with Kilitch Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilitch Drugs Limited has no effect on the direction of G Tec i.e., G Tec and Kilitch Drugs go up and down completely randomly.

Pair Corralation between G Tec and Kilitch Drugs

Assuming the 90 days trading horizon G Tec Jainx Education is expected to generate 2.16 times more return on investment than Kilitch Drugs. However, G Tec is 2.16 times more volatile than Kilitch Drugs Limited. It trades about 0.15 of its potential returns per unit of risk. Kilitch Drugs Limited is currently generating about 0.18 per unit of risk. If you would invest  3,422  in G Tec Jainx Education on September 28, 2024 and sell it today you would earn a total of  321.00  from holding G Tec Jainx Education or generate 9.38% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

G Tec Jainx Education  vs.  Kilitch Drugs Limited

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Kilitch Drugs Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kilitch Drugs Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Kilitch Drugs is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with G Tec and Kilitch Drugs

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

The idea behind G Tec Jainx Education and Kilitch Drugs Limited 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.