Correlation Between GTL and Kewal Kiran

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

By analyzing existing cross correlation between GTL Limited and Kewal Kiran Clothing, you can compare the effects of market volatilities on GTL and Kewal Kiran 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 GTL with a short position of Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of GTL and Kewal Kiran.

Diversification Opportunities for GTL and Kewal Kiran

0.67

Correlation Coefficient

GTL  Kewal Kiran

Poor diversification

The 3 months correlation between GTL and Kewal is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding GTL Limited and Kewal Kiran Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewal Kiran Clothing and GTL 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 GTL Limited are associated (or correlated) with Kewal Kiran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewal Kiran Clothing has no effect on the direction of GTL i.e., GTL and Kewal Kiran go up and down completely randomly.

Pair Corralation between GTL and Kewal Kiran

Assuming the 90 days trading horizon GTL Limited is expected to under-perform the Kewal Kiran. In addition to that, GTL is 1.17 times more volatile than Kewal Kiran Clothing. It trades about -0.21 of its total potential returns per unit of risk. Kewal Kiran Clothing is currently generating about -0.14 per unit of volatility. If you would invest  57,825  in Kewal Kiran Clothing on December 30, 2024 and sell it today you would lose (11,800) from holding Kewal Kiran Clothing or give up 20.41% of portfolio value over 90 days.

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

GTL Limited  vs.  Kewal Kiran Clothing

GTL Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days GTL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Kewal Kiran Clothing

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kewal Kiran Clothing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with GTL and Kewal Kiran

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

The idea behind GTL Limited and Kewal Kiran Clothing 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..