Correlation Between KEC International and Ganesh Housing

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

Diversification Opportunities for KEC International and Ganesh Housing

KECGaneshDiversified AwayKECGaneshDiversified Away100%
0.69
  Correlation Coefficient

Poor diversification

The 3 months correlation between KEC and Ganesh is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding KEC International Limited and Ganesh Housing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ganesh Housing and KEC International 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 KEC International Limited are associated (or correlated) with Ganesh Housing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ganesh Housing has no effect on the direction of KEC International i.e., KEC International and Ganesh Housing go up and down completely randomly.

Pair Corralation between KEC International and Ganesh Housing

Assuming the 90 days trading horizon KEC International Limited is expected to under-perform the Ganesh Housing. In addition to that, KEC International is 1.03 times more volatile than Ganesh Housing. It trades about 0.0 of its total potential returns per unit of risk. Ganesh Housing is currently generating about 0.13 per unit of volatility. If you would invest  99,190  in Ganesh Housing on October 13, 2024 and sell it today you would earn a total of  24,490  from holding Ganesh Housing or generate 24.69% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

KEC International Limited  vs.  Ganesh Housing

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -100102030405060
JavaScript chart by amCharts 3.21.15KEC GANESHHOUC
       Timeline  
KEC International 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days KEC International Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, KEC International is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9009501,0001,0501,1001,1501,2001,2501,300
Ganesh Housing 

Risk-Adjusted Performance

10 of 100

 
Weak
 
Strong
OK
Compared to the overall equity markets, risk-adjusted returns on investments in Ganesh Housing are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Ganesh Housing demonstrated solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan9501,0001,0501,1001,1501,2001,2501,3001,350

KEC International and Ganesh Housing Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-4.92-3.68-2.45-1.210.01.192.423.654.886.11 0.0300.0320.0340.0360.0380.0400.042
JavaScript chart by amCharts 3.21.15KEC GANESHHOUC
       Returns  

Pair Trading with KEC International and Ganesh Housing

The main advantage of trading using opposite KEC International and Ganesh Housing positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KEC International position performs unexpectedly, Ganesh Housing 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 Ganesh Housing will offset losses from the drop in Ganesh Housing's long position.
The idea behind KEC International Limited and Ganesh Housing 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.

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