Correlation Between KIOCL and Yatharth Hospital

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

By analyzing existing cross correlation between KIOCL Limited and Yatharth Hospital Trauma, you can compare the effects of market volatilities on KIOCL and Yatharth Hospital 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 Yatharth Hospital. Check out your portfolio center. Please also check ongoing floating volatility patterns of KIOCL and Yatharth Hospital.

Diversification Opportunities for KIOCL and Yatharth Hospital

-0.76

Correlation Coefficient

KIOCL  Yatharth Hospital

Pay attention - limited upside

The 3 months correlation between KIOCL and Yatharth is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding KIOCL Limited and Yatharth Hospital Trauma in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yatharth Hospital Trauma 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 Yatharth Hospital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yatharth Hospital Trauma has no effect on the direction of KIOCL i.e., KIOCL and Yatharth Hospital go up and down completely randomly.

Pair Corralation between KIOCL and Yatharth Hospital

Assuming the 90 days trading horizon KIOCL Limited is expected to under-perform the Yatharth Hospital. In addition to that, KIOCL is 1.29 times more volatile than Yatharth Hospital Trauma. It trades about -0.03 of its total potential returns per unit of risk. Yatharth Hospital Trauma is currently generating about 0.09 per unit of volatility. If you would invest  52,035  in Yatharth Hospital Trauma on September 2, 2024 and sell it today you would earn a total of  7,430  from holding Yatharth Hospital Trauma or generate 14.28% return on investment over 90 days.

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

KIOCL Limited  vs.  Yatharth Hospital Trauma

KIOCL Limited

Risk-Adjusted Performance

0 of 100

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 very healthy basic indicators, KIOCL is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Yatharth Hospital Trauma

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yatharth Hospital Trauma are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Yatharth Hospital unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KIOCL and Yatharth Hospital

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

The idea behind KIOCL Limited and Yatharth Hospital Trauma 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.