Correlation Between Kewal Kiran and Styrenix Performance

Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and Styrenix Performance 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 Styrenix Performance 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 Styrenix Performance Materials, you can compare the effects of market volatilities on Kewal Kiran and Styrenix Performance 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 Styrenix Performance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Styrenix Performance.

Diversification Opportunities for Kewal Kiran and Styrenix Performance

-0.42

Correlation Coefficient

Kewal Kiran  Styrenix Performance

Very good diversification

The 3 months correlation between Kewal and Styrenix is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Styrenix Performance Materials in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Styrenix Performance 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 Styrenix Performance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Styrenix Performance has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Styrenix Performance go up and down completely randomly.

Pair Corralation between Kewal Kiran and Styrenix Performance

Assuming the 90 days trading horizon Kewal Kiran is expected to generate 7.66 times less return on investment than Styrenix Performance. But when comparing it to its historical volatility, Kewal Kiran Clothing is 1.35 times less risky than Styrenix Performance. It trades about 0.02 of its potential returns per unit of risk. Styrenix Performance Materials is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  66,864  in Styrenix Performance Materials on October 11, 2024 and sell it today you would earn a total of  234,166  from holding Styrenix Performance Materials or generate 350.21% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.39%
Values	Daily Returns

Kewal Kiran Clothing  vs.  Styrenix Performance Materials

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 uncertain 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.

Styrenix Performance

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Styrenix Performance Materials are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady basic indicators, Styrenix Performance demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kewal Kiran and Styrenix Performance

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

The idea behind Kewal Kiran Clothing and Styrenix Performance Materials 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.