Correlation Between Kukil Metal and InfoBank

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

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

Diversification Opportunities for Kukil Metal and InfoBank

-0.34

Correlation Coefficient

Kukil Metal  InfoBank

Very good diversification

The 3 months correlation between Kukil and InfoBank is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Kukil Metal Co and InfoBank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InfoBank and Kukil Metal 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 Kukil Metal Co are associated (or correlated) with InfoBank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InfoBank has no effect on the direction of Kukil Metal i.e., Kukil Metal and InfoBank go up and down completely randomly.

Pair Corralation between Kukil Metal and InfoBank

Assuming the 90 days trading horizon Kukil Metal Co is expected to generate 1.18 times more return on investment than InfoBank. However, Kukil Metal is 1.18 times more volatile than InfoBank. It trades about 0.0 of its potential returns per unit of risk. InfoBank is currently generating about 0.0 per unit of risk. If you would invest  259,846  in Kukil Metal Co on October 4, 2024 and sell it today you would lose (86,846) from holding Kukil Metal Co or give up 33.42% of portfolio value over 90 days.

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

Kukil Metal Co  vs.  InfoBank

Kukil Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kukil Metal 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.

InfoBank

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InfoBank are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, InfoBank sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kukil Metal and InfoBank

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

The idea behind Kukil Metal Co and InfoBank 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.