Correlation Between ILFS Investment and Kalyani Investment

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

By analyzing existing cross correlation between ILFS Investment Managers and Kalyani Investment, you can compare the effects of market volatilities on ILFS Investment and Kalyani Investment 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 ILFS Investment with a short position of Kalyani Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and Kalyani Investment.

Diversification Opportunities for ILFS Investment and Kalyani Investment

0.88

Correlation Coefficient

ILFS Investment  Kalyani Investment

Very poor diversification

The 3 months correlation between ILFS and Kalyani is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and ILFS Investment 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 ILFS Investment Managers are associated (or correlated) with Kalyani Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Investment has no effect on the direction of ILFS Investment i.e., ILFS Investment and Kalyani Investment go up and down completely randomly.

Pair Corralation between ILFS Investment and Kalyani Investment

Assuming the 90 days trading horizon ILFS Investment Managers is expected to generate 1.08 times more return on investment than Kalyani Investment. However, ILFS Investment is 1.08 times more volatile than Kalyani Investment. It trades about -0.08 of its potential returns per unit of risk. Kalyani Investment is currently generating about -0.34 per unit of risk. If you would invest  1,137  in ILFS Investment Managers on November 29, 2024 and sell it today you would lose (143.00) from holding ILFS Investment Managers or give up 12.58% of portfolio value over 90 days.

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

ILFS Investment Managers  vs.  Kalyani Investment

ILFS Investment Managers

Risk-Adjusted Performance

Very Weak

Over the last 90 days ILFS Investment Managers 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.

Kalyani Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kalyani Investment 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 basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with ILFS Investment and Kalyani Investment

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

The idea behind ILFS Investment Managers and Kalyani Investment 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.