Correlation Between INKON Life and Keda Clean

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

By analyzing existing cross correlation between INKON Life Technology and Keda Clean Energy, you can compare the effects of market volatilities on INKON Life and Keda Clean 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 INKON Life with a short position of Keda Clean. Check out your portfolio center. Please also check ongoing floating volatility patterns of INKON Life and Keda Clean.

Diversification Opportunities for INKON Life and Keda Clean

0.62

Correlation Coefficient

INKON Life  Keda Clean

Poor diversification

The 3 months correlation between INKON and Keda is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding INKON Life Technology and Keda Clean Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keda Clean Energy and INKON Life 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 INKON Life Technology are associated (or correlated) with Keda Clean. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keda Clean Energy has no effect on the direction of INKON Life i.e., INKON Life and Keda Clean go up and down completely randomly.

Pair Corralation between INKON Life and Keda Clean

Assuming the 90 days trading horizon INKON Life Technology is expected to generate 1.35 times more return on investment than Keda Clean. However, INKON Life is 1.35 times more volatile than Keda Clean Energy. It trades about -0.01 of its potential returns per unit of risk. Keda Clean Energy is currently generating about -0.05 per unit of risk. If you would invest  1,158  in INKON Life Technology on October 26, 2024 and sell it today you would lose (291.00) from holding INKON Life Technology or give up 25.13% of portfolio value over 90 days.

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

INKON Life Technology  vs.  Keda Clean Energy

INKON Life Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days INKON Life Technology 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.

Keda Clean Energy

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Keda Clean Energy are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Keda Clean is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with INKON Life and Keda Clean

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

The idea behind INKON Life Technology and Keda Clean Energy 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..