Correlation Between Kindom Construction and ThinTech Materials

Can any of the company-specific risk be diversified away by investing in both Kindom Construction and ThinTech Materials 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 Kindom Construction and ThinTech Materials into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kindom Construction Corp and ThinTech Materials Technology, you can compare the effects of market volatilities on Kindom Construction and ThinTech Materials 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 Kindom Construction with a short position of ThinTech Materials. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kindom Construction and ThinTech Materials.

Diversification Opportunities for Kindom Construction and ThinTech Materials

-0.53

Correlation Coefficient

Kindom Construction  ThinTech Materials

Excellent diversification

The 3 months correlation between Kindom and ThinTech is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kindom Construction Corp and ThinTech Materials Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ThinTech Materials and Kindom Construction 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 Kindom Construction Corp are associated (or correlated) with ThinTech Materials. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ThinTech Materials has no effect on the direction of Kindom Construction i.e., Kindom Construction and ThinTech Materials go up and down completely randomly.

Pair Corralation between Kindom Construction and ThinTech Materials

Assuming the 90 days trading horizon Kindom Construction Corp is expected to under-perform the ThinTech Materials. But the stock apears to be less risky and, when comparing its historical volatility, Kindom Construction Corp is 1.4 times less risky than ThinTech Materials. The stock trades about -0.01 of its potential returns per unit of risk. The ThinTech Materials Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  4,410  in ThinTech Materials Technology on October 9, 2024 and sell it today you would earn a total of  2,760  from holding ThinTech Materials Technology or generate 62.59% return on investment over 90 days.

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

Kindom Construction Corp  vs.  ThinTech Materials Technology

Kindom Construction Corp

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kindom Construction Corp are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kindom Construction may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ThinTech Materials

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ThinTech Materials Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Kindom Construction and ThinTech Materials

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

The idea behind Kindom Construction Corp and ThinTech Materials 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.

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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.