Correlation Between Kalyani Investment and General Insurance

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

By analyzing existing cross correlation between Kalyani Investment and General Insurance, you can compare the effects of market volatilities on Kalyani Investment and General Insurance 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 General Insurance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Investment and General Insurance.

Diversification Opportunities for Kalyani Investment and General Insurance

-0.33

Correlation Coefficient

Kalyani Investment  General Insurance

Very good diversification

The 3 months correlation between Kalyani and General is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Investment and General Insurance in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on General Insurance 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 General Insurance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of General Insurance has no effect on the direction of Kalyani Investment i.e., Kalyani Investment and General Insurance go up and down completely randomly.

Pair Corralation between Kalyani Investment and General Insurance

Assuming the 90 days trading horizon Kalyani Investment is expected to generate 3.25 times less return on investment than General Insurance. In addition to that, Kalyani Investment is 1.09 times more volatile than General Insurance. It trades about 0.02 of its total potential returns per unit of risk. General Insurance is currently generating about 0.09 per unit of volatility. If you would invest  36,637  in General Insurance on September 21, 2024 and sell it today you would earn a total of  7,608  from holding General Insurance or generate 20.77% return on investment over 90 days.

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

Kalyani Investment  vs.  General Insurance

Kalyani Investment

Risk-Adjusted Performance

0 of 100

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 comparatively stable basic indicators, Kalyani Investment is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

General Insurance

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in General Insurance are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain fundamental indicators, General Insurance may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Kalyani Investment and General Insurance

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

The idea behind Kalyani Investment and General Insurance 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.