Correlation Between Kalyani Investment and Shyam Telecom

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

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

Diversification Opportunities for Kalyani Investment and Shyam Telecom

0.94

Correlation Coefficient

Kalyani Investment  Shyam Telecom

Almost no diversification

The 3 months correlation between Kalyani and Shyam is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Investment and Shyam Telecom Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shyam Telecom Limited 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 Shyam Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shyam Telecom Limited has no effect on the direction of Kalyani Investment i.e., Kalyani Investment and Shyam Telecom go up and down completely randomly.

Pair Corralation between Kalyani Investment and Shyam Telecom

Assuming the 90 days trading horizon Kalyani Investment is expected to generate 0.67 times more return on investment than Shyam Telecom. However, Kalyani Investment is 1.5 times less risky than Shyam Telecom. It trades about -0.34 of its potential returns per unit of risk. Shyam Telecom Limited is currently generating about -0.34 per unit of risk. If you would invest  629,715  in Kalyani Investment on November 29, 2024 and sell it today you would lose (241,785) from holding Kalyani Investment or give up 38.4% of portfolio value over 90 days.

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

Kalyani Investment  vs.  Shyam Telecom Limited

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 weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in March 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Shyam Telecom Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shyam Telecom Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in March 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Kalyani Investment and Shyam Telecom

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

The idea behind Kalyani Investment and Shyam Telecom 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.