Correlation Between Kohinoor Foods and Diligent Media

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

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

Diversification Opportunities for Kohinoor Foods and Diligent Media

0.3

Correlation Coefficient

Kohinoor Foods  Diligent Media

Weak diversification

The 3 months correlation between Kohinoor and Diligent is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kohinoor Foods Limited and Diligent Media in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Diligent Media and Kohinoor Foods 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 Kohinoor Foods Limited are associated (or correlated) with Diligent Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Diligent Media has no effect on the direction of Kohinoor Foods i.e., Kohinoor Foods and Diligent Media go up and down completely randomly.

Pair Corralation between Kohinoor Foods and Diligent Media

Assuming the 90 days trading horizon Kohinoor Foods Limited is expected to under-perform the Diligent Media. In addition to that, Kohinoor Foods is 1.03 times more volatile than Diligent Media. It trades about -0.01 of its total potential returns per unit of risk. Diligent Media is currently generating about 0.06 per unit of volatility. If you would invest  320.00  in Diligent Media on September 29, 2024 and sell it today you would earn a total of  318.00  from holding Diligent Media or generate 99.38% return on investment over 90 days.

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

Kohinoor Foods Limited  vs.  Diligent Media

Kohinoor Foods

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kohinoor Foods Limited 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 healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Diligent Media

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Diligent Media are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite fairly conflicting fundamental indicators, Diligent Media demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kohinoor Foods and Diligent Media

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

The idea behind Kohinoor Foods Limited and Diligent Media 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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.