Correlation Between Kohinoor Foods and Emcure Pharmaceuticals

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

Diversification Opportunities for Kohinoor Foods and Emcure Pharmaceuticals

0.93

Correlation Coefficient

Kohinoor Foods  Emcure Pharmaceuticals

Almost no diversification

The 3 months correlation between Kohinoor and Emcure is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Kohinoor Foods Limited and Emcure Pharmaceuticals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Emcure Pharmaceuticals 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 Emcure Pharmaceuticals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Emcure Pharmaceuticals has no effect on the direction of Kohinoor Foods i.e., Kohinoor Foods and Emcure Pharmaceuticals go up and down completely randomly.

Pair Corralation between Kohinoor Foods and Emcure Pharmaceuticals

Assuming the 90 days trading horizon Kohinoor Foods Limited is expected to generate 1.26 times more return on investment than Emcure Pharmaceuticals. However, Kohinoor Foods is 1.26 times more volatile than Emcure Pharmaceuticals. It trades about -0.16 of its potential returns per unit of risk. Emcure Pharmaceuticals is currently generating about -0.21 per unit of risk. If you would invest  4,729  in Kohinoor Foods Limited on December 26, 2024 and sell it today you would lose (1,438) from holding Kohinoor Foods Limited or give up 30.41% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	98.39%
Values	Daily Returns

Kohinoor Foods Limited  vs.  Emcure Pharmaceuticals

Kohinoor Foods

Risk-Adjusted Performance

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 fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Emcure Pharmaceuticals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Emcure Pharmaceuticals has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Kohinoor Foods and Emcure Pharmaceuticals

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

The idea behind Kohinoor Foods Limited and Emcure Pharmaceuticals 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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.