Correlation Between Akme Fintrade and KIOCL

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

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

Diversification Opportunities for Akme Fintrade and KIOCL

0.74

Correlation Coefficient

Akme Fintrade  KIOCL

Poor diversification

The 3 months correlation between Akme and KIOCL is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Akme Fintrade India and KIOCL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIOCL Limited and Akme Fintrade 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 Akme Fintrade India are associated (or correlated) with KIOCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIOCL Limited has no effect on the direction of Akme Fintrade i.e., Akme Fintrade and KIOCL go up and down completely randomly.

Pair Corralation between Akme Fintrade and KIOCL

Assuming the 90 days trading horizon Akme Fintrade India is expected to generate 1.01 times more return on investment than KIOCL. However, Akme Fintrade is 1.01 times more volatile than KIOCL Limited. It trades about -0.12 of its potential returns per unit of risk. KIOCL Limited is currently generating about -0.14 per unit of risk. If you would invest  8,969  in Akme Fintrade India on December 30, 2024 and sell it today you would lose (2,450) from holding Akme Fintrade India or give up 27.32% of portfolio value over 90 days.

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

Akme Fintrade India  vs.  KIOCL Limited

Akme Fintrade India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

KIOCL Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days KIOCL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Akme Fintrade and KIOCL

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

The idea behind Akme Fintrade India and KIOCL Limited 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.