Correlation Between Kalyani Investment and Samhi Hotels

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

By analyzing existing cross correlation between Kalyani Investment and Samhi Hotels Limited, you can compare the effects of market volatilities on Kalyani Investment and Samhi Hotels 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 Samhi Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Investment and Samhi Hotels.

Diversification Opportunities for Kalyani Investment and Samhi Hotels

-0.4

Correlation Coefficient

Kalyani Investment  Samhi Hotels

Very good diversification

The 3 months correlation between Kalyani and Samhi is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Investment and Samhi Hotels Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Samhi Hotels Limited 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 Samhi Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Samhi Hotels Limited has no effect on the direction of Kalyani Investment i.e., Kalyani Investment and Samhi Hotels go up and down completely randomly.

Pair Corralation between Kalyani Investment and Samhi Hotels

Assuming the 90 days trading horizon Kalyani Investment is expected to generate 1.42 times more return on investment than Samhi Hotels. However, Kalyani Investment is 1.42 times more volatile than Samhi Hotels Limited. It trades about 0.1 of its potential returns per unit of risk. Samhi Hotels Limited is currently generating about 0.02 per unit of risk. If you would invest  325,635  in Kalyani Investment on September 4, 2024 and sell it today you would earn a total of  303,160  from holding Kalyani Investment or generate 93.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Kalyani Investment  vs.  Samhi Hotels Limited

Kalyani Investment

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Investment are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Kalyani Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Samhi Hotels Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Samhi Hotels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's primary 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 Samhi Hotels

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

The idea behind Kalyani Investment and Samhi Hotels 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..