Correlation Between Kalyani Steels and Le Travenues

Can any of the company-specific risk be diversified away by investing in both Kalyani Steels and Le Travenues 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 Kalyani Steels and Le Travenues into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kalyani Steels Limited and Le Travenues Technology, you can compare the effects of market volatilities on Kalyani Steels and Le Travenues 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 Kalyani Steels with a short position of Le Travenues. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kalyani Steels and Le Travenues.

Diversification Opportunities for Kalyani Steels and Le Travenues

0.5

Correlation Coefficient

Kalyani Steels  Le Travenues

Very weak diversification

The 3 months correlation between Kalyani and IXIGO is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Kalyani Steels Limited and Le Travenues Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Le Travenues Technology and Kalyani Steels 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 Kalyani Steels Limited are associated (or correlated) with Le Travenues. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Le Travenues Technology has no effect on the direction of Kalyani Steels i.e., Kalyani Steels and Le Travenues go up and down completely randomly.

Pair Corralation between Kalyani Steels and Le Travenues

Assuming the 90 days trading horizon Kalyani Steels is expected to generate 2.77 times less return on investment than Le Travenues. But when comparing it to its historical volatility, Kalyani Steels Limited is 1.3 times less risky than Le Travenues. It trades about 0.12 of its potential returns per unit of risk. Le Travenues Technology is currently generating about 0.26 of returns per unit of risk over similar time horizon. If you would invest  14,405  in Le Travenues Technology on May 6, 2025 and sell it today you would earn a total of  9,855  from holding Le Travenues Technology or generate 68.41% return on investment over 90 days.

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

Kalyani Steels Limited  vs.  Le Travenues Technology

Kalyani Steels

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kalyani Steels Limited are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak technical and fundamental indicators, Kalyani Steels exhibited solid returns over the last few months and may actually be approaching a breakup point.

Le Travenues Technology

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Le Travenues Technology are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady forward indicators, Le Travenues displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kalyani Steels and Le Travenues

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

The idea behind Kalyani Steels Limited and Le Travenues Technology 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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.