Correlation Between N B and Kalyani Investment

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

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

Diversification Opportunities for N B and Kalyani Investment

0.02

Correlation Coefficient

N B  Kalyani Investment

Significant diversification

The 3 months correlation between NBIFIN and Kalyani is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding N B I and Kalyani Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kalyani Investment and N B 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 N B I 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 N B i.e., N B and Kalyani Investment go up and down completely randomly.

Pair Corralation between N B and Kalyani Investment

Assuming the 90 days trading horizon N B I is expected to generate 0.92 times more return on investment than Kalyani Investment. However, N B I is 1.08 times less risky than Kalyani Investment. It trades about 0.25 of its potential returns per unit of risk. Kalyani Investment is currently generating about 0.05 per unit of risk. If you would invest  237,050  in N B I on September 13, 2024 and sell it today you would earn a total of  126,580  from holding N B I or generate 53.4% return on investment over 90 days.

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

N B I  vs.  Kalyani Investment

N B I

Risk-Adjusted Performance

19 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in N B I are ranked lower than 19 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, N B sustained solid returns over the last few months and may actually be approaching a breakup point.

Kalyani Investment

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Investment are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Kalyani Investment may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with N B and Kalyani Investment

The main advantage of trading using opposite N B and Kalyani Investment positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if N B 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 N B I 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.