Correlation Between Kewal Kiran and Kalpataru Projects

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

By analyzing existing cross correlation between Kewal Kiran Clothing and Kalpataru Projects International, you can compare the effects of market volatilities on Kewal Kiran and Kalpataru Projects 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 Kewal Kiran with a short position of Kalpataru Projects. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Kalpataru Projects.

Diversification Opportunities for Kewal Kiran and Kalpataru Projects

0.19

Correlation Coefficient

Kewal Kiran  Kalpataru Projects

Average diversification

The 3 months correlation between Kewal and Kalpataru is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Kalpataru Projects Internation in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalpataru Projects and Kewal Kiran 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 Kewal Kiran Clothing are associated (or correlated) with Kalpataru Projects. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalpataru Projects has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Kalpataru Projects go up and down completely randomly.

Pair Corralation between Kewal Kiran and Kalpataru Projects

Assuming the 90 days trading horizon Kewal Kiran Clothing is expected to under-perform the Kalpataru Projects. In addition to that, Kewal Kiran is 1.15 times more volatile than Kalpataru Projects International. It trades about -0.28 of its total potential returns per unit of risk. Kalpataru Projects International is currently generating about -0.16 per unit of volatility. If you would invest  128,265  in Kalpataru Projects International on October 13, 2024 and sell it today you would lose (7,900) from holding Kalpataru Projects International or give up 6.16% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	95.24%
Values	Daily Returns

Kewal Kiran Clothing  vs.  Kalpataru Projects Internation

Kewal Kiran Clothing

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kewal Kiran Clothing has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in February 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Kalpataru Projects

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kalpataru Projects International has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kewal Kiran and Kalpataru Projects

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

The idea behind Kewal Kiran Clothing and Kalpataru Projects International 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.