Correlation Between Datamatics Global and Kilitch Drugs

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

By analyzing existing cross correlation between Datamatics Global Services and Kilitch Drugs Limited, you can compare the effects of market volatilities on Datamatics Global and Kilitch Drugs 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 Datamatics Global with a short position of Kilitch Drugs. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datamatics Global and Kilitch Drugs.

Diversification Opportunities for Datamatics Global and Kilitch Drugs

0.38

Correlation Coefficient

Datamatics Global  Kilitch Drugs

Weak diversification

The 3 months correlation between Datamatics and Kilitch is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Datamatics Global Services and Kilitch Drugs Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kilitch Drugs Limited and Datamatics Global 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 Datamatics Global Services are associated (or correlated) with Kilitch Drugs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kilitch Drugs Limited has no effect on the direction of Datamatics Global i.e., Datamatics Global and Kilitch Drugs go up and down completely randomly.

Pair Corralation between Datamatics Global and Kilitch Drugs

Assuming the 90 days trading horizon Datamatics Global is expected to generate 1.06 times less return on investment than Kilitch Drugs. But when comparing it to its historical volatility, Datamatics Global Services is 1.18 times less risky than Kilitch Drugs. It trades about 0.15 of its potential returns per unit of risk. Kilitch Drugs Limited is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest  35,015  in Kilitch Drugs Limited on April 23, 2025 and sell it today you would earn a total of  9,435  from holding Kilitch Drugs Limited or generate 26.95% return on investment over 90 days.

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

Datamatics Global Services  vs.  Kilitch Drugs Limited

Datamatics Global

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Datamatics Global Services are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak forward indicators, Datamatics Global unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kilitch Drugs Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kilitch Drugs Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Kilitch Drugs demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Datamatics Global and Kilitch Drugs

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

The idea behind Datamatics Global Services and Kilitch Drugs 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.