Correlation Between Sri Panwa and CK Power

Can any of the company-specific risk be diversified away by investing in both Sri Panwa and CK Power 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 Sri Panwa and CK Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Sri panwa Hospitality and CK Power Public, you can compare the effects of market volatilities on Sri Panwa and CK Power 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 Sri Panwa with a short position of CK Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sri Panwa and CK Power.

Diversification Opportunities for Sri Panwa and CK Power

0.92

Correlation Coefficient

Sri Panwa  CK Power

Almost no diversification

The 3 months correlation between Sri and CKP-R is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Sri panwa Hospitality and CK Power Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CK Power Public and Sri Panwa 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 Sri panwa Hospitality are associated (or correlated) with CK Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CK Power Public has no effect on the direction of Sri Panwa i.e., Sri Panwa and CK Power go up and down completely randomly.

Pair Corralation between Sri Panwa and CK Power

Assuming the 90 days trading horizon Sri panwa Hospitality is expected to generate 0.84 times more return on investment than CK Power. However, Sri panwa Hospitality is 1.18 times less risky than CK Power. It trades about 0.04 of its potential returns per unit of risk. CK Power Public is currently generating about -0.06 per unit of risk. If you would invest  439.00  in Sri panwa Hospitality on December 2, 2024 and sell it today you would earn a total of  55.00  from holding Sri panwa Hospitality or generate 12.53% return on investment over 90 days.

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

Sri panwa Hospitality  vs.  CK Power Public

Sri panwa Hospitality

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sri panwa Hospitality has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

CK Power Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days CK Power Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Sri Panwa and CK Power

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

The idea behind Sri panwa Hospitality and CK Power Public 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.