Correlation Between KNR Constructions and DJ Mediaprint

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

By analyzing existing cross correlation between KNR Constructions Limited and DJ Mediaprint Logistics, you can compare the effects of market volatilities on KNR Constructions and DJ Mediaprint 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 KNR Constructions with a short position of DJ Mediaprint. Check out your portfolio center. Please also check ongoing floating volatility patterns of KNR Constructions and DJ Mediaprint.

Diversification Opportunities for KNR Constructions and DJ Mediaprint

0.68

Correlation Coefficient

KNR Constructions  DJ Mediaprint

Poor diversification

The 3 months correlation between KNR and DJML is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding KNR Constructions Limited and DJ Mediaprint Logistics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DJ Mediaprint Logistics and KNR Constructions 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 KNR Constructions Limited are associated (or correlated) with DJ Mediaprint. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DJ Mediaprint Logistics has no effect on the direction of KNR Constructions i.e., KNR Constructions and DJ Mediaprint go up and down completely randomly.

Pair Corralation between KNR Constructions and DJ Mediaprint

Assuming the 90 days trading horizon KNR Constructions is expected to generate 19.79 times less return on investment than DJ Mediaprint. But when comparing it to its historical volatility, KNR Constructions Limited is 9.36 times less risky than DJ Mediaprint. It trades about 0.04 of its potential returns per unit of risk. DJ Mediaprint Logistics is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  5,189  in DJ Mediaprint Logistics on October 4, 2024 and sell it today you would earn a total of  12,609  from holding DJ Mediaprint Logistics or generate 242.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.79%
Values	Daily Returns

KNR Constructions Limited  vs.  DJ Mediaprint Logistics

KNR Constructions

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in KNR Constructions Limited are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, KNR Constructions may actually be approaching a critical reversion point that can send shares even higher in February 2025.

DJ Mediaprint Logistics

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in DJ Mediaprint Logistics are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, DJ Mediaprint unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with KNR Constructions and DJ Mediaprint

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

The idea behind KNR Constructions Limited and DJ Mediaprint Logistics 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.