Correlation Between PI Industries and Khaitan Chemicals

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

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

Diversification Opportunities for PI Industries and Khaitan Chemicals

0.82

Correlation Coefficient

PI Industries  Khaitan Chemicals

Very poor diversification

The 3 months correlation between PIIND and Khaitan is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding PI Industries Limited and Khaitan Chemicals Fertilizers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Khaitan Chemicals and PI Industries 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 PI Industries Limited are associated (or correlated) with Khaitan Chemicals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Khaitan Chemicals has no effect on the direction of PI Industries i.e., PI Industries and Khaitan Chemicals go up and down completely randomly.

Pair Corralation between PI Industries and Khaitan Chemicals

Assuming the 90 days trading horizon PI Industries is expected to generate 6.02 times less return on investment than Khaitan Chemicals. But when comparing it to its historical volatility, PI Industries Limited is 2.37 times less risky than Khaitan Chemicals. It trades about 0.13 of its potential returns per unit of risk. Khaitan Chemicals Fertilizers is currently generating about 0.34 of returns per unit of risk over similar time horizon. If you would invest  5,308  in Khaitan Chemicals Fertilizers on April 21, 2025 and sell it today you would earn a total of  5,111  from holding Khaitan Chemicals Fertilizers or generate 96.29% return on investment over 90 days.

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

PI Industries Limited  vs.  Khaitan Chemicals Fertilizers

PI Industries Limited

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in PI Industries Limited are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of very weak forward indicators, PI Industries may actually be approaching a critical reversion point that can send shares even higher in August 2025.

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 26 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical indicators, Khaitan Chemicals exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with PI Industries and Khaitan Chemicals

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

The idea behind PI Industries Limited and Khaitan Chemicals Fertilizers 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.