Correlation Between Kalyani Investment and City Union

Can any of the company-specific risk be diversified away by investing in both Kalyani Investment and City Union 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 Kalyani Investment and City Union into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kalyani Investment and City Union Bank, you can compare the effects of market volatilities on Kalyani Investment and City Union 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 Kalyani Investment with a short position of City Union. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Investment and City Union.

Diversification Opportunities for Kalyani Investment and City Union

0.81

Correlation Coefficient

Kalyani Investment  City Union

Very poor diversification

The 3 months correlation between Kalyani and City is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Investment and City Union Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on City Union Bank and Kalyani Investment 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 Kalyani Investment are associated (or correlated) with City Union. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of City Union Bank has no effect on the direction of Kalyani Investment i.e., Kalyani Investment and City Union go up and down completely randomly.

Pair Corralation between Kalyani Investment and City Union

Assuming the 90 days trading horizon Kalyani Investment is expected to under-perform the City Union. In addition to that, Kalyani Investment is 1.69 times more volatile than City Union Bank. It trades about -0.15 of its total potential returns per unit of risk. City Union Bank is currently generating about -0.07 per unit of volatility. If you would invest  17,455  in City Union Bank on December 22, 2024 and sell it today you would lose (1,447) from holding City Union Bank or give up 8.29% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.39%
Values	Daily Returns

Kalyani Investment  vs.  City Union Bank

Kalyani Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kalyani Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

City Union Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days City Union Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Pair Trading with Kalyani Investment and City Union

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

The idea behind Kalyani Investment and City Union Bank 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.