Correlation Between Kisan Telecom and TSI

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

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

Diversification Opportunities for Kisan Telecom and TSI

0.44

Correlation Coefficient

Kisan Telecom  TSI

Very weak diversification

The 3 months correlation between Kisan and TSI is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kisan Telecom Co and TSI Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TSI Co and Kisan Telecom 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 Kisan Telecom Co are associated (or correlated) with TSI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TSI Co has no effect on the direction of Kisan Telecom i.e., Kisan Telecom and TSI go up and down completely randomly.

Pair Corralation between Kisan Telecom and TSI

Assuming the 90 days trading horizon Kisan Telecom is expected to generate 3.7 times less return on investment than TSI. But when comparing it to its historical volatility, Kisan Telecom Co is 2.32 times less risky than TSI. It trades about 0.11 of its potential returns per unit of risk. TSI Co is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest  492,000  in TSI Co on October 13, 2024 and sell it today you would earn a total of  53,000  from holding TSI Co or generate 10.77% return on investment over 90 days.

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

Kisan Telecom Co  vs.  TSI Co

Kisan Telecom

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kisan Telecom Co are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kisan Telecom is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

TSI Co

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days TSI Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kisan Telecom and TSI

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

The idea behind Kisan Telecom Co and TSI Co 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..