Correlation Between Hybrid Financial and Kaynes Technology

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

By analyzing existing cross correlation between Hybrid Financial Services and Kaynes Technology India, you can compare the effects of market volatilities on Hybrid Financial and Kaynes Technology 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 Hybrid Financial with a short position of Kaynes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hybrid Financial and Kaynes Technology.

Diversification Opportunities for Hybrid Financial and Kaynes Technology

0.72

Correlation Coefficient

Hybrid Financial  Kaynes Technology

Poor diversification

The 3 months correlation between Hybrid and Kaynes is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hybrid Financial Services and Kaynes Technology India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaynes Technology India and Hybrid Financial 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 Hybrid Financial Services are associated (or correlated) with Kaynes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaynes Technology India has no effect on the direction of Hybrid Financial i.e., Hybrid Financial and Kaynes Technology go up and down completely randomly.

Pair Corralation between Hybrid Financial and Kaynes Technology

Assuming the 90 days trading horizon Hybrid Financial is expected to generate 2.38 times less return on investment than Kaynes Technology. But when comparing it to its historical volatility, Hybrid Financial Services is 1.08 times less risky than Kaynes Technology. It trades about 0.06 of its potential returns per unit of risk. Kaynes Technology India is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  546,935  in Kaynes Technology India on October 23, 2024 and sell it today you would earn a total of  114,400  from holding Kaynes Technology India or generate 20.92% return on investment over 90 days.

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

Hybrid Financial Services  vs.  Kaynes Technology India

Hybrid Financial Services

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hybrid Financial Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak technical and fundamental indicators, Hybrid Financial may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Kaynes Technology India

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kaynes Technology India are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady basic indicators, Kaynes Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hybrid Financial and Kaynes Technology

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

The idea behind Hybrid Financial Services and Kaynes Technology India 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.