Correlation Between Kilitch Drugs and Akme Fintrade

Can any of the company-specific risk be diversified away by investing in both Kilitch Drugs and Akme Fintrade 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 Kilitch Drugs and Akme Fintrade into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kilitch Drugs Limited and Akme Fintrade India, you can compare the effects of market volatilities on Kilitch Drugs and Akme Fintrade 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 Kilitch Drugs with a short position of Akme Fintrade. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilitch Drugs and Akme Fintrade.

Diversification Opportunities for Kilitch Drugs and Akme Fintrade

0.04

Correlation Coefficient

Kilitch Drugs  Akme Fintrade

Significant diversification

The 3 months correlation between Kilitch and Akme is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Kilitch Drugs Limited and Akme Fintrade India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Akme Fintrade India and Kilitch Drugs 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 Kilitch Drugs Limited are associated (or correlated) with Akme Fintrade. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Akme Fintrade India has no effect on the direction of Kilitch Drugs i.e., Kilitch Drugs and Akme Fintrade go up and down completely randomly.

Pair Corralation between Kilitch Drugs and Akme Fintrade

Assuming the 90 days trading horizon Kilitch Drugs Limited is expected to generate 0.65 times more return on investment than Akme Fintrade. However, Kilitch Drugs Limited is 1.54 times less risky than Akme Fintrade. It trades about 0.1 of its potential returns per unit of risk. Akme Fintrade India is currently generating about -0.12 per unit of risk. If you would invest  31,745  in Kilitch Drugs Limited on December 29, 2024 and sell it today you would earn a total of  4,515  from holding Kilitch Drugs Limited or generate 14.22% return on investment over 90 days.

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

Kilitch Drugs Limited  vs.  Akme Fintrade India

Kilitch Drugs Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kilitch Drugs Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite fairly unfluctuating basic indicators, Kilitch Drugs demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Akme Fintrade India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Akme Fintrade India 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 April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Kilitch Drugs and Akme Fintrade

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

The idea behind Kilitch Drugs Limited and Akme Fintrade India 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.