Correlation Between Juniper Hotels and KNR Constructions

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

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

Diversification Opportunities for Juniper Hotels and KNR Constructions

0.86

Correlation Coefficient

Juniper Hotels  KNR Constructions

Very poor diversification

The 3 months correlation between Juniper and KNR is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Juniper Hotels and KNR Constructions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KNR Constructions and Juniper Hotels 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 Juniper Hotels are associated (or correlated) with KNR Constructions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KNR Constructions has no effect on the direction of Juniper Hotels i.e., Juniper Hotels and KNR Constructions go up and down completely randomly.

Pair Corralation between Juniper Hotels and KNR Constructions

Assuming the 90 days trading horizon Juniper Hotels is expected to generate 0.98 times more return on investment than KNR Constructions. However, Juniper Hotels is 1.02 times less risky than KNR Constructions. It trades about -0.11 of its potential returns per unit of risk. KNR Constructions Limited is currently generating about -0.12 per unit of risk. If you would invest  34,430  in Juniper Hotels on December 25, 2024 and sell it today you would lose (7,370) from holding Juniper Hotels or give up 21.41% of portfolio value over 90 days.

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

Juniper Hotels  vs.  KNR Constructions Limited

Juniper Hotels

Risk-Adjusted Performance

Very Weak

Over the last 90 days Juniper Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

KNR Constructions

Risk-Adjusted Performance

Very Weak

Over the last 90 days KNR Constructions Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Juniper Hotels and KNR Constructions

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

The idea behind Juniper Hotels and KNR Constructions Limited 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.