Correlation Between Sunflag Iron and KIOCL

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

By analyzing existing cross correlation between Sunflag Iron And and KIOCL Limited, you can compare the effects of market volatilities on Sunflag Iron and KIOCL 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 Sunflag Iron with a short position of KIOCL. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunflag Iron and KIOCL.

Diversification Opportunities for Sunflag Iron and KIOCL

0.86

Correlation Coefficient

Sunflag Iron  KIOCL

Very poor diversification

The 3 months correlation between Sunflag and KIOCL is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Sunflag Iron And and KIOCL Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KIOCL Limited and Sunflag Iron 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 Sunflag Iron And are associated (or correlated) with KIOCL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KIOCL Limited has no effect on the direction of Sunflag Iron i.e., Sunflag Iron and KIOCL go up and down completely randomly.

Pair Corralation between Sunflag Iron and KIOCL

Assuming the 90 days trading horizon Sunflag Iron And is expected to generate 0.94 times more return on investment than KIOCL. However, Sunflag Iron And is 1.07 times less risky than KIOCL. It trades about -0.03 of its potential returns per unit of risk. KIOCL Limited is currently generating about -0.14 per unit of risk. If you would invest  26,744  in Sunflag Iron And on December 26, 2024 and sell it today you would lose (2,607) from holding Sunflag Iron And or give up 9.75% of portfolio value over 90 days.

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

Sunflag Iron And  vs.  KIOCL Limited

Sunflag Iron And

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sunflag Iron And has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's essential indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

KIOCL Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days KIOCL Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Sunflag Iron and KIOCL

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

The idea behind Sunflag Iron And and KIOCL Limited 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.