Correlation Between Fateh Sports and KSB Pumps

Specify exactly 2 symbols:
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 Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy47.37%
ValuesDaily Returns

Fateh Sports Wear  vs.  KSB Pumps

 Performance 
       Timeline  
Fateh Sports Wear 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Fateh Sports Wear has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
KSB Pumps 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in KSB Pumps are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, KSB Pumps sustained solid returns over the last few months and may actually be approaching a breakup point.

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.
The idea behind Fateh Sports Wear and KSB Pumps 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.
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.

Other Complementary Tools

Premium Stories
Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope
Technical Analysis
Check basic technical indicators and analysis based on most latest market data
Stock Screener
Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook.
FinTech Suite
Use AI to screen and filter profitable investment opportunities
USA ETFs
Find actively traded Exchange Traded Funds (ETF) in USA