Correlation Between SRI TRANG and K W

Can any of the company-specific risk be diversified away by investing in both SRI TRANG and K W 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 TRANG and K W into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SRI TRANG GLOVES and K W Metal, you can compare the effects of market volatilities on SRI TRANG and K W 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 TRANG with a short position of K W. Check out your portfolio center. Please also check ongoing floating volatility patterns of SRI TRANG and K W.

Diversification Opportunities for SRI TRANG and K W

-0.01

Correlation Coefficient

SRI TRANG  K W

Good diversification

The 3 months correlation between SRI and KWM is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding SRI TRANG GLOVES and K W Metal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on K W Metal and SRI TRANG 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 TRANG GLOVES are associated (or correlated) with K W. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of K W Metal has no effect on the direction of SRI TRANG i.e., SRI TRANG and K W go up and down completely randomly.

Pair Corralation between SRI TRANG and K W

Assuming the 90 days trading horizon SRI TRANG GLOVES is expected to under-perform the K W. But the stock apears to be less risky and, when comparing its historical volatility, SRI TRANG GLOVES is 21.38 times less risky than K W. The stock trades about 0.0 of its potential returns per unit of risk. The K W Metal is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  238.00  in K W Metal on October 26, 2024 and sell it today you would lose (130.00) from holding K W Metal or give up 54.62% of portfolio value over 90 days.

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

SRI TRANG GLOVES  vs.  K W Metal

SRI TRANG GLOVES

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in SRI TRANG GLOVES are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting technical and fundamental indicators, SRI TRANG sustained solid returns over the last few months and may actually be approaching a breakup point.

K W Metal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days K W Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's primary indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with SRI TRANG and K W

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

The idea behind SRI TRANG GLOVES and K W Metal 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.