Correlation Between Kamat Hotels and Akme Fintrade

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Kamat Hotels and Akme Fintrade 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 Kamat Hotels and Akme Fintrade into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kamat Hotels Limited and Akme Fintrade India, you can compare the effects of market volatilities on Kamat Hotels and Akme Fintrade 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 Kamat Hotels with a short position of Akme Fintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kamat Hotels and Akme Fintrade.

Diversification Opportunities for Kamat Hotels and Akme Fintrade

0.29
  Correlation Coefficient

Modest diversification

The 3 months correlation between Kamat and Akme is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Kamat Hotels Limited and Akme Fintrade India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akme Fintrade India and Kamat 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 Kamat Hotels Limited are associated (or correlated) with Akme Fintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akme Fintrade India has no effect on the direction of Kamat Hotels i.e., Kamat Hotels and Akme Fintrade go up and down completely randomly.

Pair Corralation between Kamat Hotels and Akme Fintrade

Assuming the 90 days trading horizon Kamat Hotels Limited is expected to generate 0.79 times more return on investment than Akme Fintrade. However, Kamat Hotels Limited is 1.26 times less risky than Akme Fintrade. It trades about 0.05 of its potential returns per unit of risk. Akme Fintrade India is currently generating about -0.06 per unit of risk. If you would invest  12,565  in Kamat Hotels Limited on October 25, 2024 and sell it today you would earn a total of  8,933  from holding Kamat Hotels Limited or generate 71.09% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy30.12%
ValuesDaily Returns

Kamat Hotels Limited  vs.  Akme Fintrade India

 Performance 
       Timeline  
Kamat Hotels Limited 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Modest
Over the last 90 days Kamat Hotels Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kamat Hotels is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.
Akme Fintrade India 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Akme Fintrade India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Kamat Hotels and Akme Fintrade Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kamat Hotels and Akme Fintrade

The main advantage of trading using opposite Kamat Hotels and Akme Fintrade positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kamat Hotels position performs unexpectedly, Akme Fintrade 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 Akme Fintrade will offset losses from the drop in Akme Fintrade's long position.
The idea behind Kamat Hotels Limited and Akme Fintrade 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.

Other Complementary Tools

Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Share Portfolio
Track or share privately all of your investments from the convenience of any device
Global Correlations
Find global opportunities by holding instruments from different markets
Analyst Advice
Analyst recommendations and target price estimates broken down by several categories