Correlation Between PNC Infratech and Kalyani Investment

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

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

Diversification Opportunities for PNC Infratech and Kalyani Investment

-0.08

Correlation Coefficient

PNC Infratech  Kalyani Investment

Good diversification

The 3 months correlation between PNC and Kalyani is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding PNC Infratech Limited and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and PNC Infratech 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 PNC Infratech Limited are associated (or correlated) with Kalyani Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Investment has no effect on the direction of PNC Infratech i.e., PNC Infratech and Kalyani Investment go up and down completely randomly.

Pair Corralation between PNC Infratech and Kalyani Investment

Assuming the 90 days trading horizon PNC Infratech Limited is expected to under-perform the Kalyani Investment. In addition to that, PNC Infratech is 1.15 times more volatile than Kalyani Investment. It trades about -0.11 of its total potential returns per unit of risk. Kalyani Investment is currently generating about -0.02 per unit of volatility. If you would invest  649,515  in Kalyani Investment on September 27, 2024 and sell it today you would lose (58,770) from holding Kalyani Investment or give up 9.05% of portfolio value over 90 days.

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

PNC Infratech Limited  vs.  Kalyani Investment

PNC Infratech Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days PNC Infratech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

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 latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with PNC Infratech and Kalyani Investment

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

The idea behind PNC Infratech Limited and Kalyani Investment 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.