Correlation Between Kalyani Steels and Zaggle Prepaid

Can any of the company-specific risk be diversified away by investing in both Kalyani Steels and Zaggle Prepaid 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 Kalyani Steels and Zaggle Prepaid into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kalyani Steels Limited and Zaggle Prepaid Ocean, you can compare the effects of market volatilities on Kalyani Steels and Zaggle Prepaid 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 Kalyani Steels with a short position of Zaggle Prepaid. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Steels and Zaggle Prepaid.

Diversification Opportunities for Kalyani Steels and Zaggle Prepaid

0.87

Correlation Coefficient

Kalyani Steels  Zaggle Prepaid

Very poor diversification

The 3 months correlation between Kalyani and Zaggle is 0.87. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Steels Limited and Zaggle Prepaid Ocean in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Zaggle Prepaid Ocean and Kalyani Steels 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 Kalyani Steels Limited are associated (or correlated) with Zaggle Prepaid. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Zaggle Prepaid Ocean has no effect on the direction of Kalyani Steels i.e., Kalyani Steels and Zaggle Prepaid go up and down completely randomly.

Pair Corralation between Kalyani Steels and Zaggle Prepaid

Assuming the 90 days trading horizon Kalyani Steels is expected to generate 1.68 times less return on investment than Zaggle Prepaid. But when comparing it to its historical volatility, Kalyani Steels Limited is 1.3 times less risky than Zaggle Prepaid. It trades about 0.1 of its potential returns per unit of risk. Zaggle Prepaid Ocean is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  15,835  in Zaggle Prepaid Ocean on September 28, 2024 and sell it today you would earn a total of  41,130  from holding Zaggle Prepaid Ocean or generate 259.74% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	63.71%
Values	Daily Returns

Kalyani Steels Limited  vs.  Zaggle Prepaid Ocean

Kalyani Steels

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Steels Limited are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Kalyani Steels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Zaggle Prepaid Ocean

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Zaggle Prepaid Ocean are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unsteady technical and fundamental indicators, Zaggle Prepaid sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kalyani Steels and Zaggle Prepaid

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

The idea behind Kalyani Steels Limited and Zaggle Prepaid Ocean 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.