Correlation Between Kilitch Drugs and Page Industries

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

Diversification Opportunities for Kilitch Drugs and Page Industries

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Kilitch and Page is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Kilitch Drugs Limited and Page Industries Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Page Industries 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 Page Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Page Industries has no effect on the direction of Kilitch Drugs i.e., Kilitch Drugs and Page Industries go up and down completely randomly.

Pair Corralation between Kilitch Drugs and Page Industries

Assuming the 90 days trading horizon Kilitch Drugs Limited is expected to generate 1.88 times more return on investment than Page Industries. However, Kilitch Drugs is 1.88 times more volatile than Page Industries Limited. It trades about 0.06 of its potential returns per unit of risk. Page Industries Limited is currently generating about -0.2 per unit of risk. If you would invest  32,465  in Kilitch Drugs Limited on October 22, 2024 and sell it today you would earn a total of  650.00  from holding Kilitch Drugs Limited or generate 2.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy95.0%
ValuesDaily Returns

Kilitch Drugs Limited  vs.  Page Industries Limited

 Performance 
       Timeline  
Kilitch Drugs Limited 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in Kilitch Drugs Limited are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly inconsistent basic indicators, Kilitch Drugs may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Page Industries 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Page Industries Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather sound forward indicators, Page Industries is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Kilitch Drugs and Page Industries Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kilitch Drugs and Page Industries

The main advantage of trading using opposite Kilitch Drugs and Page Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kilitch Drugs position performs unexpectedly, Page Industries 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 Page Industries will offset losses from the drop in Page Industries' long position.
The idea behind Kilitch Drugs Limited and Page Industries 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.

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