Correlation Between S P and Kewal Kiran

Can any of the company-specific risk be diversified away by investing in both S P and Kewal Kiran 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 Kewal Kiran 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 Kewal Kiran Clothing, you can compare the effects of market volatilities on S P and Kewal Kiran 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 Kewal Kiran. Check out your portfolio center. Please also check ongoing floating volatility patterns of S P and Kewal Kiran.

Diversification Opportunities for S P and Kewal Kiran

0.06

Correlation Coefficient

S P  Kewal Kiran

Significant diversification

The 3 months correlation between SPAL and Kewal is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding S P Apparels and Kewal Kiran Clothing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kewal Kiran Clothing 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 Kewal Kiran. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kewal Kiran Clothing has no effect on the direction of S P i.e., S P and Kewal Kiran go up and down completely randomly.

Pair Corralation between S P and Kewal Kiran

Assuming the 90 days trading horizon S P is expected to generate 1.49 times less return on investment than Kewal Kiran. In addition to that, S P is 1.42 times more volatile than Kewal Kiran Clothing. It trades about 0.07 of its total potential returns per unit of risk. Kewal Kiran Clothing is currently generating about 0.14 per unit of volatility. If you would invest  46,807  in Kewal Kiran Clothing on April 24, 2025 and sell it today you would earn a total of  9,073  from holding Kewal Kiran Clothing or generate 19.38% return on investment over 90 days.

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

S P Apparels  vs.  Kewal Kiran Clothing

S P Apparels

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in S P Apparels are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, S P unveiled solid returns over the last few months and may actually be approaching a breakup point.

Kewal Kiran Clothing

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kewal Kiran Clothing are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, Kewal Kiran unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with S P and Kewal Kiran

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

The idea behind S P Apparels and Kewal Kiran Clothing 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.