Correlation Between Le Travenues and Kaynes Technology

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

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

Diversification Opportunities for Le Travenues and Kaynes Technology

0.19

Correlation Coefficient

Le Travenues  Kaynes Technology

Average diversification

The 3 months correlation between IXIGO and Kaynes is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Le Travenues Technology 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 Le Travenues 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 Le Travenues Technology 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 Le Travenues i.e., Le Travenues and Kaynes Technology go up and down completely randomly.

Pair Corralation between Le Travenues and Kaynes Technology

Assuming the 90 days trading horizon Le Travenues is expected to generate 1.68 times less return on investment than Kaynes Technology. In addition to that, Le Travenues is 1.19 times more volatile than Kaynes Technology India. It trades about 0.25 of its total potential returns per unit of risk. Kaynes Technology India is currently generating about 0.5 per unit of volatility. If you would invest  577,585  in Kaynes Technology India on September 20, 2024 and sell it today you would earn a total of  132,550  from holding Kaynes Technology India or generate 22.95% return on investment over 90 days.

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

Le Travenues Technology  vs.  Kaynes Technology India

Le Travenues Technology

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Le Travenues Technology are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Le Travenues displayed solid returns over the last few months and may actually be approaching a breakup point.

Kaynes Technology India

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaynes Technology India are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Kaynes Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Le Travenues and Kaynes Technology

The main advantage of trading using opposite Le Travenues and Kaynes Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Le Travenues 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 Le Travenues Technology 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.

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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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.