Correlation Between KIOCL and Punjab Sind

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

By analyzing existing cross correlation between KIOCL Limited and Punjab Sind Bank, you can compare the effects of market volatilities on KIOCL and Punjab Sind 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 KIOCL with a short position of Punjab Sind. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIOCL and Punjab Sind.

Diversification Opportunities for KIOCL and Punjab Sind

0.82

Correlation Coefficient

KIOCL  Punjab Sind

Very poor diversification

The 3 months correlation between KIOCL and Punjab is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding KIOCL Limited and Punjab Sind Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Punjab Sind Bank and KIOCL 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 KIOCL Limited are associated (or correlated) with Punjab Sind. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Punjab Sind Bank has no effect on the direction of KIOCL i.e., KIOCL and Punjab Sind go up and down completely randomly.

Pair Corralation between KIOCL and Punjab Sind

Assuming the 90 days trading horizon KIOCL Limited is expected to under-perform the Punjab Sind. In addition to that, KIOCL is 1.14 times more volatile than Punjab Sind Bank. It trades about -0.14 of its total potential returns per unit of risk. Punjab Sind Bank is currently generating about -0.02 per unit of volatility. If you would invest  4,723  in Punjab Sind Bank on December 30, 2024 and sell it today you would lose (365.00) from holding Punjab Sind Bank or give up 7.73% of portfolio value over 90 days.

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

KIOCL Limited  vs.  Punjab Sind Bank

KIOCL Limited

Risk-Adjusted Performance

Very Weak

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

Punjab Sind Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Punjab Sind Bank has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound technical and fundamental indicators, Punjab Sind is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with KIOCL and Punjab Sind

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

The idea behind KIOCL Limited and Punjab Sind Bank 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.

Check out your portfolio center.

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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.