Correlation Between Aryt Industries and Kerur Holdings

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

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

Diversification Opportunities for Aryt Industries and Kerur Holdings

-0.44

Correlation Coefficient

Aryt Industries  Kerur Holdings

Very good diversification

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

Pair Corralation between Aryt Industries and Kerur Holdings

Assuming the 90 days trading horizon Aryt Industries is expected to generate 2.5 times more return on investment than Kerur Holdings. However, Aryt Industries is 2.5 times more volatile than Kerur Holdings. It trades about 0.35 of its potential returns per unit of risk. Kerur Holdings is currently generating about -0.07 per unit of risk. If you would invest  91,900  in Aryt Industries on December 30, 2024 and sell it today you would earn a total of  98,800  from holding Aryt Industries or generate 107.51% return on investment over 90 days.

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

Aryt Industries  vs.  Kerur Holdings

Aryt Industries

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Aryt Industries are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Aryt Industries sustained solid returns over the last few months and may actually be approaching a breakup point.

Kerur Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kerur Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Aryt Industries and Kerur Holdings

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

The idea behind Aryt Industries and Kerur Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.