Correlation Between Kaynes Technology and Apollo Sindoori

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

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

Diversification Opportunities for Kaynes Technology and Apollo Sindoori

-0.11

Correlation Coefficient

Kaynes Technology  Apollo Sindoori

Good diversification

The 3 months correlation between Kaynes and Apollo is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Kaynes Technology India and Apollo Sindoori Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apollo Sindoori Hotels and Kaynes Technology 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 Kaynes Technology India are associated (or correlated) with Apollo Sindoori. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apollo Sindoori Hotels has no effect on the direction of Kaynes Technology i.e., Kaynes Technology and Apollo Sindoori go up and down completely randomly.

Pair Corralation between Kaynes Technology and Apollo Sindoori

Assuming the 90 days trading horizon Kaynes Technology India is expected to generate 1.38 times more return on investment than Apollo Sindoori. However, Kaynes Technology is 1.38 times more volatile than Apollo Sindoori Hotels. It trades about 0.02 of its potential returns per unit of risk. Apollo Sindoori Hotels is currently generating about 0.0 per unit of risk. If you would invest  530,160  in Kaynes Technology India on October 25, 2024 and sell it today you would earn a total of  4,915  from holding Kaynes Technology India or generate 0.93% return on investment over 90 days.

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

Kaynes Technology India  vs.  Apollo Sindoori Hotels

Kaynes Technology India

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kaynes Technology India are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Kaynes Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Apollo Sindoori Hotels

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Apollo Sindoori Hotels has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy technical indicators, Apollo Sindoori is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kaynes Technology and Apollo Sindoori

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

The idea behind Kaynes Technology India and Apollo Sindoori Hotels 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.