Correlation Between Khaitan Chemicals and Cambridge Technology

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

By analyzing existing cross correlation between Khaitan Chemicals Fertilizers and Cambridge Technology Enterprises, you can compare the effects of market volatilities on Khaitan Chemicals and Cambridge Technology 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 Khaitan Chemicals with a short position of Cambridge Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Khaitan Chemicals and Cambridge Technology.

Diversification Opportunities for Khaitan Chemicals and Cambridge Technology

0.42

Correlation Coefficient

Khaitan Chemicals  Cambridge Technology

Very weak diversification

The 3 months correlation between Khaitan and Cambridge is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Khaitan Chemicals Fertilizers and Cambridge Technology Enterpris in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambridge Technology and Khaitan Chemicals 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 Khaitan Chemicals Fertilizers are associated (or correlated) with Cambridge Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambridge Technology has no effect on the direction of Khaitan Chemicals i.e., Khaitan Chemicals and Cambridge Technology go up and down completely randomly.

Pair Corralation between Khaitan Chemicals and Cambridge Technology

Assuming the 90 days trading horizon Khaitan Chemicals Fertilizers is expected to generate 1.2 times more return on investment than Cambridge Technology. However, Khaitan Chemicals is 1.2 times more volatile than Cambridge Technology Enterprises. It trades about 0.35 of its potential returns per unit of risk. Cambridge Technology Enterprises is currently generating about 0.04 per unit of risk. If you would invest  5,714  in Khaitan Chemicals Fertilizers on April 25, 2025 and sell it today you would earn a total of  5,341  from holding Khaitan Chemicals Fertilizers or generate 93.47% return on investment over 90 days.

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

Khaitan Chemicals Fertilizers  vs.  Cambridge Technology Enterpris

Khaitan Chemicals

Risk-Adjusted Performance

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Khaitan Chemicals Fertilizers are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical indicators, Khaitan Chemicals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Cambridge Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cambridge Technology Enterprises are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, Cambridge Technology may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Khaitan Chemicals and Cambridge Technology

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

The idea behind Khaitan Chemicals Fertilizers and Cambridge Technology Enterprises 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.