Correlation Between CK Power and Praram 9

Can any of the company-specific risk be diversified away by investing in both CK Power and Praram 9 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 Praram 9 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 Praram 9 Hospital, you can compare the effects of market volatilities on CK Power and Praram 9 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 Praram 9. Check out your portfolio center. Please also check ongoing floating volatility patterns of CK Power and Praram 9.

Diversification Opportunities for CK Power and Praram 9

0.9

Correlation Coefficient

CK Power  Praram 9

Almost no diversification

The 3 months correlation between CKP and Praram is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding CK Power Public and Praram 9 Hospital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Praram 9 Hospital 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 Praram 9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Praram 9 Hospital has no effect on the direction of CK Power i.e., CK Power and Praram 9 go up and down completely randomly.

Pair Corralation between CK Power and Praram 9

Assuming the 90 days trading horizon CK Power Public is expected to under-perform the Praram 9. In addition to that, CK Power is 1.03 times more volatile than Praram 9 Hospital. It trades about -0.03 of its total potential returns per unit of risk. Praram 9 Hospital is currently generating about 0.01 per unit of volatility. If you would invest  1,985  in Praram 9 Hospital on December 22, 2024 and sell it today you would earn a total of  55.00  from holding Praram 9 Hospital or generate 2.77% return on investment over 90 days.

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

CK Power Public  vs.  Praram 9 Hospital

CK Power Public

Risk-Adjusted Performance

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 basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Praram 9 Hospital

Risk-Adjusted Performance

Very Weak

Over the last 90 days Praram 9 Hospital has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with CK Power and Praram 9

The main advantage of trading using opposite CK Power and Praram 9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CK Power position performs unexpectedly, Praram 9 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 Praram 9 will offset losses from the drop in Praram 9's long position.

The idea behind CK Power Public and Praram 9 Hospital 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.