Correlation Between Shivalik Bimetal and Keynote Financial

Can any of the company-specific risk be diversified away by investing in both Shivalik Bimetal and Keynote Financial 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 Shivalik Bimetal and Keynote Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shivalik Bimetal Controls and Keynote Financial Services, you can compare the effects of market volatilities on Shivalik Bimetal and Keynote Financial 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 Shivalik Bimetal with a short position of Keynote Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shivalik Bimetal and Keynote Financial.

Diversification Opportunities for Shivalik Bimetal and Keynote Financial

0.78

Correlation Coefficient

Shivalik Bimetal  Keynote Financial

Poor diversification

The 3 months correlation between Shivalik and Keynote is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Shivalik Bimetal Controls and Keynote Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Keynote Financial and Shivalik Bimetal 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 Shivalik Bimetal Controls are associated (or correlated) with Keynote Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Keynote Financial has no effect on the direction of Shivalik Bimetal i.e., Shivalik Bimetal and Keynote Financial go up and down completely randomly.

Pair Corralation between Shivalik Bimetal and Keynote Financial

Assuming the 90 days trading horizon Shivalik Bimetal is expected to generate 2.14 times less return on investment than Keynote Financial. But when comparing it to its historical volatility, Shivalik Bimetal Controls is 1.56 times less risky than Keynote Financial. It trades about 0.05 of its potential returns per unit of risk. Keynote Financial Services is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  10,548  in Keynote Financial Services on September 24, 2024 and sell it today you would earn a total of  14,338  from holding Keynote Financial Services or generate 135.93% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	99.8%
Values	Daily Returns

Shivalik Bimetal Controls  vs.  Keynote Financial Services

Shivalik Bimetal Controls

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shivalik Bimetal Controls are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Shivalik Bimetal is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Keynote Financial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Keynote Financial Services has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, Keynote Financial is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Shivalik Bimetal and Keynote Financial

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

The idea behind Shivalik Bimetal Controls and Keynote Financial Services 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 Stocks Directory module to find actively traded stocks across global markets.