Correlation Between Kerur Holdings and Victory Supermarket

Can any of the company-specific risk be diversified away by investing in both Kerur Holdings and Victory Supermarket 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 Kerur Holdings and Victory Supermarket into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kerur Holdings and Victory Supermarket Chain, you can compare the effects of market volatilities on Kerur Holdings and Victory Supermarket 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 Kerur Holdings with a short position of Victory Supermarket. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kerur Holdings and Victory Supermarket.

Diversification Opportunities for Kerur Holdings and Victory Supermarket

0.64

Correlation Coefficient

Kerur Holdings  Victory Supermarket

Poor diversification

The 3 months correlation between Kerur and Victory is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kerur Holdings and Victory Supermarket Chain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Victory Supermarket Chain and Kerur Holdings 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 Kerur Holdings are associated (or correlated) with Victory Supermarket. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Victory Supermarket Chain has no effect on the direction of Kerur Holdings i.e., Kerur Holdings and Victory Supermarket go up and down completely randomly.

Pair Corralation between Kerur Holdings and Victory Supermarket

Assuming the 90 days trading horizon Kerur Holdings is expected to generate 0.93 times more return on investment than Victory Supermarket. However, Kerur Holdings is 1.07 times less risky than Victory Supermarket. It trades about 0.14 of its potential returns per unit of risk. Victory Supermarket Chain is currently generating about -0.07 per unit of risk. If you would invest  724,537  in Kerur Holdings on November 29, 2024 and sell it today you would earn a total of  78,563  from holding Kerur Holdings or generate 10.84% return on investment over 90 days.

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

Kerur Holdings  vs.  Victory Supermarket Chain

Kerur Holdings

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kerur Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kerur Holdings sustained solid returns over the last few months and may actually be approaching a breakup point.

Victory Supermarket Chain

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victory Supermarket Chain has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Kerur Holdings and Victory Supermarket

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

The idea behind Kerur Holdings and Victory Supermarket Chain 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.