Correlation Between Kilitch Drugs and PB Fintech

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

Diversification Opportunities for Kilitch Drugs and PB Fintech

0.41

Correlation Coefficient

Kilitch Drugs  PB Fintech

Very weak diversification

The 3 months correlation between Kilitch and POLICYBZR is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Kilitch Drugs Limited and PB Fintech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PB Fintech Limited 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 PB Fintech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PB Fintech Limited has no effect on the direction of Kilitch Drugs i.e., Kilitch Drugs and PB Fintech go up and down completely randomly.

Pair Corralation between Kilitch Drugs and PB Fintech

Assuming the 90 days trading horizon Kilitch Drugs is expected to generate 71.76 times less return on investment than PB Fintech. But when comparing it to its historical volatility, Kilitch Drugs Limited is 1.08 times less risky than PB Fintech. It trades about 0.0 of its potential returns per unit of risk. PB Fintech Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  121,450  in PB Fintech Limited on October 14, 2024 and sell it today you would earn a total of  64,845  from holding PB Fintech Limited or generate 53.39% return on investment over 90 days.

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

Kilitch Drugs Limited  vs.  PB Fintech Limited

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 fairly strong basic indicators, Kilitch Drugs is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

PB Fintech Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PB Fintech Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, PB Fintech sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kilitch Drugs and PB Fintech

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

The idea behind Kilitch Drugs Limited and PB Fintech 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.