Correlation Between S P and Kaynes Technology

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

By analyzing existing cross correlation between S P Apparels and Kaynes Technology India, you can compare the effects of market volatilities on S P and Kaynes 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 S P with a short position of Kaynes Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of S P and Kaynes Technology.

Diversification Opportunities for S P and Kaynes Technology

0.44

Correlation Coefficient

S P  Kaynes Technology

Very weak diversification

The 3 months correlation between SPAL and Kaynes is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding S P Apparels and Kaynes Technology India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaynes Technology India and S P 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 S P Apparels are associated (or correlated) with Kaynes Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaynes Technology India has no effect on the direction of S P i.e., S P and Kaynes Technology go up and down completely randomly.

Pair Corralation between S P and Kaynes Technology

Assuming the 90 days trading horizon S P Apparels is expected to generate 1.42 times more return on investment than Kaynes Technology. However, S P is 1.42 times more volatile than Kaynes Technology India. It trades about 0.06 of its potential returns per unit of risk. Kaynes Technology India is currently generating about 0.01 per unit of risk. If you would invest  73,625  in S P Apparels on April 20, 2025 and sell it today you would earn a total of  7,105  from holding S P Apparels or generate 9.65% return on investment over 90 days.

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

S P Apparels  vs.  Kaynes Technology India

S P Apparels

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in S P Apparels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, S P may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Kaynes Technology India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Kaynes Technology India has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Kaynes Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with S P and Kaynes Technology

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

The idea behind S P Apparels and Kaynes Technology India 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.