Correlation Between CK Power and Sri Panwa

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

By analyzing existing cross correlation between CK Power Public and Sri panwa Hospitality, you can compare the effects of market volatilities on CK Power and Sri Panwa 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 CK Power with a short position of Sri Panwa. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Sri Panwa.

Diversification Opportunities for CK Power and Sri Panwa

-0.26

Correlation Coefficient

CK Power  Sri Panwa

Very good diversification

The 3 months correlation between CKP-R and Sri is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Sri panwa Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sri panwa Hospitality and CK Power 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 CK Power Public are associated (or correlated) with Sri Panwa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sri panwa Hospitality has no effect on the direction of CK Power i.e., CK Power and Sri Panwa go up and down completely randomly.

Pair Corralation between CK Power and Sri Panwa

Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Sri Panwa. In addition to that, CK Power is 1.37 times more volatile than Sri panwa Hospitality. It trades about -0.03 of its total potential returns per unit of risk. Sri panwa Hospitality is currently generating about 0.12 per unit of volatility. If you would invest  477.00  in Sri panwa Hospitality on September 13, 2024 and sell it today you would earn a total of  98.00  from holding Sri panwa Hospitality or generate 20.55% return on investment over 90 days.

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

CK Power Public  vs.  Sri panwa Hospitality

CK Power Public

Risk-Adjusted Performance

0 of 100

Very Weak

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

Sri panwa Hospitality

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sri panwa Hospitality are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Sri Panwa showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with CK Power and Sri Panwa

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

The idea behind CK Power Public and Sri panwa Hospitality 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 Global Correlations module to find global opportunities by holding instruments from different markets.