Correlation Between Shipping and Kalyani Investment

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

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

Diversification Opportunities for Shipping and Kalyani Investment

-0.39

Correlation Coefficient

Shipping  Kalyani Investment

Very good diversification

The 3 months correlation between Shipping and Kalyani is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding Shipping and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and Shipping 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 Shipping 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 Shipping i.e., Shipping and Kalyani Investment go up and down completely randomly.

Pair Corralation between Shipping and Kalyani Investment

Assuming the 90 days trading horizon Shipping is expected to under-perform the Kalyani Investment. But the stock apears to be less risky and, when comparing its historical volatility, Shipping is 1.14 times less risky than Kalyani Investment. The stock trades about 0.0 of its potential returns per unit of risk. The Kalyani Investment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  604,020  in Kalyani Investment on September 12, 2024 and sell it today you would earn a total of  61,295  from holding Kalyani Investment or generate 10.15% return on investment over 90 days.

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

Shipping  vs.  Kalyani Investment

Shipping

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shipping has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Shipping is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Kalyani Investment

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Investment are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively conflicting basic indicators, Kalyani Investment unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Shipping and Kalyani Investment

The main advantage of trading using opposite Shipping and Kalyani Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Shipping 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 Shipping 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.

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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.