Correlation Between Fateh Sports and KSB Pumps
Can any of the company-specific risk be diversified away by investing in both Fateh Sports and KSB Pumps 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 Fateh Sports and KSB Pumps into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fateh Sports Wear and KSB Pumps, you can compare the effects of market volatilities on Fateh Sports and KSB Pumps 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 Fateh Sports with a short position of KSB Pumps. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fateh Sports and KSB Pumps.
Diversification Opportunities for Fateh Sports and KSB Pumps
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Fateh and KSB is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Fateh Sports Wear and KSB Pumps in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KSB Pumps and Fateh Sports 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 Fateh Sports Wear are associated (or correlated) with KSB Pumps. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KSB Pumps has no effect on the direction of Fateh Sports i.e., Fateh Sports and KSB Pumps go up and down completely randomly.
Pair Corralation between Fateh Sports and KSB Pumps
Assuming the 90 days trading horizon Fateh Sports Wear is expected to under-perform the KSB Pumps. In addition to that, Fateh Sports is 1.16 times more volatile than KSB Pumps. It trades about -0.33 of its total potential returns per unit of risk. KSB Pumps is currently generating about -0.12 per unit of volatility. If you would invest 16,846 in KSB Pumps on October 8, 2024 and sell it today you would lose (1,135) from holding KSB Pumps or give up 6.74% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 47.37% |
Values | Daily Returns |
Fateh Sports Wear vs. KSB Pumps
Performance |
Timeline |
Fateh Sports Wear |
KSB Pumps |
Fateh Sports and KSB Pumps Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Fateh Sports and KSB Pumps
The main advantage of trading using opposite Fateh Sports and KSB Pumps positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fateh Sports position performs unexpectedly, KSB Pumps 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 KSB Pumps will offset losses from the drop in KSB Pumps' long position.Fateh Sports vs. Habib Insurance | Fateh Sports vs. Ghandhara Automobile | Fateh Sports vs. Shadab Textile Mills | Fateh Sports vs. Century Insurance |
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Check out your portfolio center.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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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