Correlation Between Kellton Tech and Sanginita Chemicals

Can any of the company-specific risk be diversified away by investing in both Kellton Tech and Sanginita Chemicals 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 Kellton Tech and Sanginita Chemicals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kellton Tech Solutions and Sanginita Chemicals Limited, you can compare the effects of market volatilities on Kellton Tech and Sanginita Chemicals 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 Kellton Tech with a short position of Sanginita Chemicals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kellton Tech and Sanginita Chemicals.

Diversification Opportunities for Kellton Tech and Sanginita Chemicals

0.23

Correlation Coefficient

Kellton Tech  Sanginita Chemicals

Modest diversification

The 3 months correlation between Kellton and Sanginita is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kellton Tech Solutions and Sanginita Chemicals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sanginita Chemicals and Kellton Tech 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 Kellton Tech Solutions are associated (or correlated) with Sanginita Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sanginita Chemicals has no effect on the direction of Kellton Tech i.e., Kellton Tech and Sanginita Chemicals go up and down completely randomly.

Pair Corralation between Kellton Tech and Sanginita Chemicals

Assuming the 90 days trading horizon Kellton Tech Solutions is expected to generate 0.95 times more return on investment than Sanginita Chemicals. However, Kellton Tech Solutions is 1.05 times less risky than Sanginita Chemicals. It trades about 0.08 of its potential returns per unit of risk. Sanginita Chemicals Limited is currently generating about -0.01 per unit of risk. If you would invest  5,740  in Kellton Tech Solutions on October 11, 2024 and sell it today you would earn a total of  10,955  from holding Kellton Tech Solutions or generate 190.85% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	99.59%
Values	Daily Returns

Kellton Tech Solutions  vs.  Sanginita Chemicals Limited

Kellton Tech Solutions

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kellton Tech Solutions are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Kellton Tech displayed solid returns over the last few months and may actually be approaching a breakup point.

Sanginita Chemicals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sanginita Chemicals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong forward indicators, Sanginita Chemicals is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kellton Tech and Sanginita Chemicals

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

The idea behind Kellton Tech Solutions and Sanginita Chemicals Limited 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.