Correlation Between Kilitch Drugs and Country Club

Can any of the company-specific risk be diversified away by investing in both Kilitch Drugs and Country Club 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 Country Club 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 Country Club Hospitality, you can compare the effects of market volatilities on Kilitch Drugs and Country Club 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 Country Club. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kilitch Drugs and Country Club.

Diversification Opportunities for Kilitch Drugs and Country Club

0.32

Correlation Coefficient

Kilitch Drugs  Country Club

Weak diversification

The 3 months correlation between Kilitch and Country is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Kilitch Drugs Limited and Country Club Hospitality in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Country Club Hospitality 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 Country Club. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Country Club Hospitality has no effect on the direction of Kilitch Drugs i.e., Kilitch Drugs and Country Club go up and down completely randomly.

Pair Corralation between Kilitch Drugs and Country Club

Assuming the 90 days trading horizon Kilitch Drugs Limited is expected to generate 0.68 times more return on investment than Country Club. However, Kilitch Drugs Limited is 1.46 times less risky than Country Club. It trades about 0.0 of its potential returns per unit of risk. Country Club Hospitality is currently generating about -0.16 per unit of risk. If you would invest  31,560  in Kilitch Drugs Limited on November 29, 2024 and sell it today you would lose (305.00) from holding Kilitch Drugs Limited or give up 0.97% of portfolio value over 90 days.

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

Kilitch Drugs Limited  vs.  Country Club Hospitality

Kilitch Drugs Limited

Risk-Adjusted Performance

Very Weak

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

Country Club Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Country Club Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in March 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kilitch Drugs and Country Club

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

The idea behind Kilitch Drugs Limited and Country Club Hospitality 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.