Correlation Between Kalyani Investment and Orissa Minerals

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

By analyzing existing cross correlation between Kalyani Investment and The Orissa Minerals, you can compare the effects of market volatilities on Kalyani Investment and Orissa Minerals 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 Kalyani Investment with a short position of Orissa Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Investment and Orissa Minerals.

Diversification Opportunities for Kalyani Investment and Orissa Minerals

-0.01

Correlation Coefficient

Kalyani Investment  Orissa Minerals

Good diversification

The 3 months correlation between Kalyani and Orissa is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Investment and The Orissa Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orissa Minerals and Kalyani Investment 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 Kalyani Investment are associated (or correlated) with Orissa Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orissa Minerals has no effect on the direction of Kalyani Investment i.e., Kalyani Investment and Orissa Minerals go up and down completely randomly.

Pair Corralation between Kalyani Investment and Orissa Minerals

Assuming the 90 days trading horizon Kalyani Investment is expected to generate 2.17 times more return on investment than Orissa Minerals. However, Kalyani Investment is 2.17 times more volatile than The Orissa Minerals. It trades about -0.15 of its potential returns per unit of risk. The Orissa Minerals is currently generating about -0.53 per unit of risk. If you would invest  628,795  in Kalyani Investment on October 1, 2024 and sell it today you would lose (32,405) from holding Kalyani Investment or give up 5.15% of portfolio value over 90 days.

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

Kalyani Investment  vs.  The Orissa Minerals

Kalyani Investment

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kalyani Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Kalyani Investment is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Orissa Minerals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days The Orissa Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward 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 Kalyani Investment and Orissa Minerals

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

The idea behind Kalyani Investment and The Orissa Minerals 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.