Correlation Between Kellton Tech and MRF

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

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

Diversification Opportunities for Kellton Tech and MRF

0.67

Correlation Coefficient

Kellton Tech  MRF

Poor diversification

The 3 months correlation between Kellton and MRF is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Kellton Tech Solutions and MRF Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MRF Limited and Kellton Tech 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 Kellton Tech Solutions are associated (or correlated) with MRF. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MRF Limited has no effect on the direction of Kellton Tech i.e., Kellton Tech and MRF go up and down completely randomly.

Pair Corralation between Kellton Tech and MRF

Assuming the 90 days trading horizon Kellton Tech Solutions is expected to generate 1.9 times more return on investment than MRF. However, Kellton Tech is 1.9 times more volatile than MRF Limited. It trades about 0.17 of its potential returns per unit of risk. MRF Limited is currently generating about 0.19 per unit of risk. If you would invest  10,908  in Kellton Tech Solutions on April 25, 2025 and sell it today you would earn a total of  3,273  from holding Kellton Tech Solutions or generate 30.01% return on investment over 90 days.

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

Kellton Tech Solutions  vs.  MRF Limited

Kellton Tech Solutions

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kellton Tech Solutions are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile basic indicators, Kellton Tech displayed solid returns over the last few months and may actually be approaching a breakup point.

MRF Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in MRF Limited are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, MRF exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kellton Tech and MRF

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

The idea behind Kellton Tech Solutions and MRF 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.