Correlation Between Kaynes Technology and Juniper Hotels

Can any of the company-specific risk be diversified away by investing in both Kaynes Technology and Juniper Hotels 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 Juniper Hotels 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 Juniper Hotels, you can compare the effects of market volatilities on Kaynes Technology and Juniper Hotels 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 Juniper Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kaynes Technology and Juniper Hotels.

Diversification Opportunities for Kaynes Technology and Juniper Hotels

0.08

Correlation Coefficient

Kaynes Technology  Juniper Hotels

Significant diversification

The 3 months correlation between Kaynes and Juniper is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Kaynes Technology India and Juniper Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Juniper 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 Juniper Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Juniper Hotels has no effect on the direction of Kaynes Technology i.e., Kaynes Technology and Juniper Hotels go up and down completely randomly.

Pair Corralation between Kaynes Technology and Juniper Hotels

Assuming the 90 days trading horizon Kaynes Technology India is expected to generate 1.1 times more return on investment than Juniper Hotels. However, Kaynes Technology is 1.1 times more volatile than Juniper Hotels. It trades about 0.15 of its potential returns per unit of risk. Juniper Hotels is currently generating about -0.09 per unit of risk. If you would invest  559,030  in Kaynes Technology India on October 11, 2024 and sell it today you would earn a total of  138,035  from holding Kaynes Technology India or generate 24.69% return on investment over 90 days.

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

Kaynes Technology India  vs.  Juniper Hotels

Kaynes Technology India

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kaynes Technology India are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, Kaynes Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Juniper Hotels

Risk-Adjusted Performance

0 of 100

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 February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kaynes Technology and Juniper Hotels

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

The idea behind Kaynes Technology India and Juniper 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.

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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.