Correlation Between Max Healthcare and Kalyani Investment

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

By analyzing existing cross correlation between Max Healthcare Institute and Kalyani Investment, you can compare the effects of market volatilities on Max Healthcare and Kalyani Investment 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 Max Healthcare with a short position of Kalyani Investment. Check out your portfolio center. Please also check ongoing floating volatility patterns of Max Healthcare and Kalyani Investment.

Diversification Opportunities for Max Healthcare and Kalyani Investment

0.77

Correlation Coefficient

Max Healthcare  Kalyani Investment

Poor diversification

The 3 months correlation between Max and Kalyani is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Max Healthcare Institute and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and Max Healthcare 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 Max Healthcare Institute are associated (or correlated) with Kalyani Investment. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kalyani Investment has no effect on the direction of Max Healthcare i.e., Max Healthcare and Kalyani Investment go up and down completely randomly.

Pair Corralation between Max Healthcare and Kalyani Investment

Assuming the 90 days trading horizon Max Healthcare Institute is expected to generate 0.94 times more return on investment than Kalyani Investment. However, Max Healthcare Institute is 1.07 times less risky than Kalyani Investment. It trades about 0.01 of its potential returns per unit of risk. Kalyani Investment is currently generating about -0.13 per unit of risk. If you would invest  115,570  in Max Healthcare Institute on December 25, 2024 and sell it today you would lose (945.00) from holding Max Healthcare Institute or give up 0.82% of portfolio value over 90 days.

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

Max Healthcare Institute  vs.  Kalyani Investment

Max Healthcare Institute

Risk-Adjusted Performance

Weak

Over the last 90 days Max Healthcare Institute has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Max Healthcare is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Kalyani Investment

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kalyani Investment has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Max Healthcare and Kalyani Investment

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

The idea behind Max Healthcare Institute and Kalyani 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.