Correlation Between Kilitch Drugs and Dev Information

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

Diversification Opportunities for Kilitch Drugs and Dev Information

-0.23

Correlation Coefficient

Kilitch Drugs  Dev Information

Very good diversification

The 3 months correlation between Kilitch and Dev is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Kilitch Drugs Limited and Dev Information Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dev Information Tech 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 Dev Information. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dev Information Tech has no effect on the direction of Kilitch Drugs i.e., Kilitch Drugs and Dev Information go up and down completely randomly.

Pair Corralation between Kilitch Drugs and Dev Information

Assuming the 90 days trading horizon Kilitch Drugs Limited is expected to generate 0.87 times more return on investment than Dev Information. However, Kilitch Drugs Limited is 1.15 times less risky than Dev Information. It trades about 0.07 of its potential returns per unit of risk. Dev Information Technology is currently generating about 0.03 per unit of risk. If you would invest  15,310  in Kilitch Drugs Limited on September 27, 2024 and sell it today you would earn a total of  17,005  from holding Kilitch Drugs Limited or generate 111.07% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.39%
Values	Daily Returns

Kilitch Drugs Limited  vs.  Dev Information Technology

Kilitch Drugs Limited

Risk-Adjusted Performance

0 of 100

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 latest unsteady performance, the Stock's basic indicators remain strong and the recent confusion on Wall Street may also be a sign of long-lasting gains for the firm traders.

Dev Information Tech

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Dev Information Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent basic indicators, Dev Information displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kilitch Drugs and Dev Information

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

The idea behind Kilitch Drugs Limited and Dev Information Technology 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.