Correlation Between India Globalization and Kane Biotech

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

By analyzing existing cross correlation between India Globalization Capital and Kane Biotech, you can compare the effects of market volatilities on India Globalization and Kane Biotech 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 India Globalization with a short position of Kane Biotech. Check out your portfolio center. Please also check ongoing floating volatility patterns of India Globalization and Kane Biotech.

Diversification Opportunities for India Globalization and Kane Biotech

0.49

Correlation Coefficient

India Globalization  Kane Biotech

Very weak diversification

The 3 months correlation between India and Kane is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding India Globalization Capital and Kane Biotech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kane Biotech and India Globalization 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 India Globalization Capital are associated (or correlated) with Kane Biotech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kane Biotech has no effect on the direction of India Globalization i.e., India Globalization and Kane Biotech go up and down completely randomly.

Pair Corralation between India Globalization and Kane Biotech

Considering the 90-day investment horizon India Globalization is expected to generate 1.63 times less return on investment than Kane Biotech. But when comparing it to its historical volatility, India Globalization Capital is 1.15 times less risky than Kane Biotech. It trades about 0.02 of its potential returns per unit of risk. Kane Biotech is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  8.30  in Kane Biotech on October 12, 2024 and sell it today you would lose (0.57) from holding Kane Biotech or give up 6.87% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	99.6%
Values	Daily Returns

India Globalization Capital  vs.  Kane Biotech

India Globalization

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days India Globalization Capital has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Kane Biotech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kane Biotech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain nearly stable which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with India Globalization and Kane Biotech

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

The idea behind India Globalization Capital and Kane Biotech 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.