Correlation Between Kaushalya Infrastructure and Silgo Retail

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

By analyzing existing cross correlation between Kaushalya Infrastructure Development and Silgo Retail Limited, you can compare the effects of market volatilities on Kaushalya Infrastructure and Silgo Retail 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 Kaushalya Infrastructure with a short position of Silgo Retail. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaushalya Infrastructure and Silgo Retail.

Diversification Opportunities for Kaushalya Infrastructure and Silgo Retail

-0.25

Correlation Coefficient

Kaushalya Infrastructure  Silgo Retail

Very good diversification

The 3 months correlation between Kaushalya and Silgo is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding Kaushalya Infrastructure Devel and Silgo Retail Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silgo Retail Limited and Kaushalya Infrastructure 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 Kaushalya Infrastructure Development are associated (or correlated) with Silgo Retail. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silgo Retail Limited has no effect on the direction of Kaushalya Infrastructure i.e., Kaushalya Infrastructure and Silgo Retail go up and down completely randomly.

Pair Corralation between Kaushalya Infrastructure and Silgo Retail

Assuming the 90 days trading horizon Kaushalya Infrastructure Development is expected to under-perform the Silgo Retail. But the stock apears to be less risky and, when comparing its historical volatility, Kaushalya Infrastructure Development is 1.87 times less risky than Silgo Retail. The stock trades about -0.04 of its potential returns per unit of risk. The Silgo Retail Limited is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,787  in Silgo Retail Limited on September 24, 2024 and sell it today you would earn a total of  3.00  from holding Silgo Retail Limited or generate 0.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kaushalya Infrastructure Devel  vs.  Silgo Retail Limited

Kaushalya Infrastructure

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kaushalya Infrastructure Development has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Kaushalya Infrastructure is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Silgo Retail Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Silgo Retail Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's essential indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kaushalya Infrastructure and Silgo Retail

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

The idea behind Kaushalya Infrastructure Development and Silgo Retail 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.

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 Commodity Directory module to find actively traded commodities issued by global exchanges.