Correlation Between Kohinoor Foods and Jindal Poly

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

Diversification Opportunities for Kohinoor Foods and Jindal Poly

0.24

Correlation Coefficient

Kohinoor Foods  Jindal Poly

Modest diversification

The 3 months correlation between Kohinoor and Jindal is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kohinoor Foods Limited and Jindal Poly Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jindal Poly Investment 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 Jindal Poly. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jindal Poly Investment has no effect on the direction of Kohinoor Foods i.e., Kohinoor Foods and Jindal Poly go up and down completely randomly.

Pair Corralation between Kohinoor Foods and Jindal Poly

Assuming the 90 days trading horizon Kohinoor Foods is expected to generate 11.4 times less return on investment than Jindal Poly. But when comparing it to its historical volatility, Kohinoor Foods Limited is 1.14 times less risky than Jindal Poly. It trades about 0.0 of its potential returns per unit of risk. Jindal Poly Investment is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  76,155  in Jindal Poly Investment on October 25, 2024 and sell it today you would earn a total of  710.00  from holding Jindal Poly Investment or generate 0.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Kohinoor Foods Limited  vs.  Jindal Poly Investment

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 very healthy basic indicators, Kohinoor Foods is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Jindal Poly Investment

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jindal Poly Investment are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Jindal Poly is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kohinoor Foods and Jindal Poly

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

The idea behind Kohinoor Foods Limited and Jindal Poly Investment 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.