Correlation Between ILFS Investment and Kohinoor Foods

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

By analyzing existing cross correlation between ILFS Investment Managers and Kohinoor Foods Limited, you can compare the effects of market volatilities on ILFS Investment and Kohinoor Foods 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 ILFS Investment with a short position of Kohinoor Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of ILFS Investment and Kohinoor Foods.

Diversification Opportunities for ILFS Investment and Kohinoor Foods

0.63

Correlation Coefficient

ILFS Investment  Kohinoor Foods

Poor diversification

The 3 months correlation between ILFS and Kohinoor is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding ILFS Investment Managers and Kohinoor Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kohinoor Foods and ILFS Investment 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 ILFS Investment Managers are associated (or correlated) with Kohinoor Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kohinoor Foods has no effect on the direction of ILFS Investment i.e., ILFS Investment and Kohinoor Foods go up and down completely randomly.

Pair Corralation between ILFS Investment and Kohinoor Foods

Assuming the 90 days trading horizon ILFS Investment Managers is expected to under-perform the Kohinoor Foods. In addition to that, ILFS Investment is 1.14 times more volatile than Kohinoor Foods Limited. It trades about -0.07 of its total potential returns per unit of risk. Kohinoor Foods Limited is currently generating about -0.02 per unit of volatility. If you would invest  3,623  in Kohinoor Foods Limited on April 25, 2025 and sell it today you would lose (91.00) from holding Kohinoor Foods Limited or give up 2.51% of portfolio value over 90 days.

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

ILFS Investment Managers  vs.  Kohinoor Foods Limited

ILFS Investment Managers

Risk-Adjusted Performance

Very Weak

Over the last 90 days ILFS Investment Managers has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's technical and fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Kohinoor Foods

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kohinoor Foods Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Kohinoor Foods is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with ILFS Investment and Kohinoor Foods

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

The idea behind ILFS Investment Managers and Kohinoor Foods 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..