Correlation Between Kewal Kiran and Ami Organics

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Can any of the company-specific risk be diversified away by investing in both Kewal Kiran and Ami Organics 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 Kewal Kiran and Ami Organics into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Kewal Kiran Clothing and Ami Organics Limited, you can compare the effects of market volatilities on Kewal Kiran and Ami Organics 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 Kewal Kiran with a short position of Ami Organics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kewal Kiran and Ami Organics.

Diversification Opportunities for Kewal Kiran and Ami Organics

-0.13
  Correlation Coefficient

Good diversification

The 3 months correlation between Kewal and Ami is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Kewal Kiran Clothing and Ami Organics Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ami Organics Limited and Kewal Kiran 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 Kewal Kiran Clothing are associated (or correlated) with Ami Organics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ami Organics Limited has no effect on the direction of Kewal Kiran i.e., Kewal Kiran and Ami Organics go up and down completely randomly.

Pair Corralation between Kewal Kiran and Ami Organics

Assuming the 90 days trading horizon Kewal Kiran Clothing is expected to generate 0.98 times more return on investment than Ami Organics. However, Kewal Kiran Clothing is 1.02 times less risky than Ami Organics. It trades about 0.17 of its potential returns per unit of risk. Ami Organics Limited is currently generating about 0.08 per unit of risk. If you would invest  45,771  in Kewal Kiran Clothing on April 25, 2025 and sell it today you would earn a total of  10,539  from holding Kewal Kiran Clothing or generate 23.03% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Kewal Kiran Clothing  vs.  Ami Organics Limited

 Performance 
       Timeline  
Kewal Kiran Clothing 

Risk-Adjusted Performance

Good

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Kewal Kiran Clothing are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Kewal Kiran unveiled solid returns over the last few months and may actually be approaching a breakup point.
Ami Organics Limited 

Risk-Adjusted Performance

Modest

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Ami Organics Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Ami Organics may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Kewal Kiran and Ami Organics Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Kewal Kiran and Ami Organics

The main advantage of trading using opposite Kewal Kiran and Ami Organics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kewal Kiran position performs unexpectedly, Ami Organics 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 Ami Organics will offset losses from the drop in Ami Organics' long position.
The idea behind Kewal Kiran Clothing and Ami Organics 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.

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