Correlation Between Kewal Kiran and Sunflag Iron

Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and Sunflag Iron 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 Kewal Kiran and Sunflag Iron into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kewal Kiran Clothing and Sunflag Iron And, you can compare the effects of market volatilities on Kewal Kiran and Sunflag Iron 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 Kewal Kiran with a short position of Sunflag Iron. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Sunflag Iron.

Diversification Opportunities for Kewal Kiran and Sunflag Iron

0.81

Correlation Coefficient

Kewal Kiran  Sunflag Iron

Very poor diversification

The 3 months correlation between Kewal and Sunflag is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Sunflag Iron And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sunflag Iron And and Kewal Kiran 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 Kewal Kiran Clothing are associated (or correlated) with Sunflag Iron. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sunflag Iron And has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Sunflag Iron go up and down completely randomly.

Pair Corralation between Kewal Kiran and Sunflag Iron

Assuming the 90 days trading horizon Kewal Kiran is expected to generate 1.89 times less return on investment than Sunflag Iron. But when comparing it to its historical volatility, Kewal Kiran Clothing is 1.54 times less risky than Sunflag Iron. It trades about 0.03 of its potential returns per unit of risk. Sunflag Iron And is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  20,949  in Sunflag Iron And on September 5, 2024 and sell it today you would earn a total of  612.00  from holding Sunflag Iron And or generate 2.92% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.41%
Values	Daily Returns

Kewal Kiran Clothing  vs.  Sunflag Iron And

Kewal Kiran Clothing

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kewal Kiran Clothing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Kewal Kiran is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Sunflag Iron And

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sunflag Iron And are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable essential indicators, Sunflag Iron is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Kewal Kiran and Sunflag Iron

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

The idea behind Kewal Kiran Clothing and Sunflag Iron And 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.