Correlation Between Kaynes Technology and Uniinfo Telecom

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

Diversification Opportunities for Kaynes Technology and Uniinfo Telecom

0.68

Correlation Coefficient

Kaynes Technology  Uniinfo Telecom

Poor diversification

The 3 months correlation between Kaynes and Uniinfo is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Kaynes Technology India and Uniinfo Telecom Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniinfo Telecom Services 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 Uniinfo Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniinfo Telecom Services has no effect on the direction of Kaynes Technology i.e., Kaynes Technology and Uniinfo Telecom go up and down completely randomly.

Pair Corralation between Kaynes Technology and Uniinfo Telecom

Assuming the 90 days trading horizon Kaynes Technology India is expected to generate 1.01 times more return on investment than Uniinfo Telecom. However, Kaynes Technology is 1.01 times more volatile than Uniinfo Telecom Services. It trades about -0.12 of its potential returns per unit of risk. Uniinfo Telecom Services is currently generating about -0.29 per unit of risk. If you would invest  706,295  in Kaynes Technology India on December 25, 2024 and sell it today you would lose (202,655) from holding Kaynes Technology India or give up 28.69% of portfolio value over 90 days.

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

Kaynes Technology India  vs.  Uniinfo Telecom Services

Kaynes Technology India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaynes Technology India 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 basic 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.

Uniinfo Telecom Services

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uniinfo Telecom Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kaynes Technology and Uniinfo Telecom

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

The idea behind Kaynes Technology India and Uniinfo Telecom Services 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.