Correlation Between Ankit Metal and Kavveri Telecom

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

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

Diversification Opportunities for Ankit Metal and Kavveri Telecom

0.85

Correlation Coefficient

Ankit Metal  Kavveri Telecom

Very poor diversification

The 3 months correlation between Ankit and Kavveri is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Ankit Metal Power and Kavveri Telecom Products in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kavveri Telecom Products and Ankit 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 Ankit Metal Power are associated (or correlated) with Kavveri Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kavveri Telecom Products has no effect on the direction of Ankit Metal i.e., Ankit Metal and Kavveri Telecom go up and down completely randomly.

Pair Corralation between Ankit Metal and Kavveri Telecom

Assuming the 90 days trading horizon Ankit Metal Power is expected to generate 0.94 times more return on investment than Kavveri Telecom. However, Ankit Metal Power is 1.06 times less risky than Kavveri Telecom. It trades about 0.04 of its potential returns per unit of risk. Kavveri Telecom Products is currently generating about 0.02 per unit of risk. If you would invest  379.00  in Ankit Metal Power on October 25, 2024 and sell it today you would earn a total of  16.00  from holding Ankit Metal Power or generate 4.22% return on investment over 90 days.

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

Ankit Metal Power  vs.  Kavveri Telecom Products

Ankit Metal Power

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ankit Metal Power are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Ankit Metal may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kavveri Telecom Products

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kavveri Telecom Products are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong basic indicators, Kavveri Telecom is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ankit Metal and Kavveri Telecom

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

The idea behind Ankit Metal Power and Kavveri Telecom Products 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.