Correlation Between Kardan Real and Axilion Smart

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

By analyzing existing cross correlation between Kardan Real Estate and Axilion Smart Mobility, you can compare the effects of market volatilities on Kardan Real and Axilion Smart 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 Kardan Real with a short position of Axilion Smart. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kardan Real and Axilion Smart.

Diversification Opportunities for Kardan Real and Axilion Smart

0.3

Correlation Coefficient

Kardan Real  Axilion Smart

Weak diversification

The 3 months correlation between Kardan and Axilion is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kardan Real Estate and Axilion Smart Mobility in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axilion Smart Mobility and Kardan Real 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 Kardan Real Estate are associated (or correlated) with Axilion Smart. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axilion Smart Mobility has no effect on the direction of Kardan Real i.e., Kardan Real and Axilion Smart go up and down completely randomly.

Pair Corralation between Kardan Real and Axilion Smart

Assuming the 90 days trading horizon Kardan Real is expected to generate 2.57 times less return on investment than Axilion Smart. But when comparing it to its historical volatility, Kardan Real Estate is 1.26 times less risky than Axilion Smart. It trades about 0.08 of its potential returns per unit of risk. Axilion Smart Mobility is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  4,550  in Axilion Smart Mobility on September 25, 2024 and sell it today you would earn a total of  380.00  from holding Axilion Smart Mobility or generate 8.35% return on investment over 90 days.

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

Kardan Real Estate  vs.  Axilion Smart Mobility

Kardan Real Estate

Risk-Adjusted Performance

14 of 100

Good

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

Axilion Smart Mobility

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Axilion Smart Mobility are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Axilion Smart sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kardan Real and Axilion Smart

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

The idea behind Kardan Real Estate and Axilion Smart Mobility 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.