Correlation Between Kingsignal Technology and Shenzhen

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

By analyzing existing cross correlation between Kingsignal Technology Co and Shenzhen AV Display Co, you can compare the effects of market volatilities on Kingsignal Technology and Shenzhen 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 Kingsignal Technology with a short position of Shenzhen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingsignal Technology and Shenzhen.

Diversification Opportunities for Kingsignal Technology and Shenzhen

0.64

Correlation Coefficient

Kingsignal Technology  Shenzhen

Poor diversification

The 3 months correlation between Kingsignal and Shenzhen is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Kingsignal Technology Co and Shenzhen AV Display Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shenzhen AV Display and Kingsignal Technology 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 Kingsignal Technology Co are associated (or correlated) with Shenzhen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shenzhen AV Display has no effect on the direction of Kingsignal Technology i.e., Kingsignal Technology and Shenzhen go up and down completely randomly.

Pair Corralation between Kingsignal Technology and Shenzhen

Assuming the 90 days trading horizon Kingsignal Technology Co is expected to generate 2.2 times more return on investment than Shenzhen. However, Kingsignal Technology is 2.2 times more volatile than Shenzhen AV Display Co. It trades about 0.01 of its potential returns per unit of risk. Shenzhen AV Display Co is currently generating about -0.13 per unit of risk. If you would invest  971.00  in Kingsignal Technology Co on October 11, 2024 and sell it today you would lose (27.00) from holding Kingsignal Technology Co or give up 2.78% of portfolio value over 90 days.

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

Kingsignal Technology Co  vs.  Shenzhen AV Display Co

Kingsignal Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsignal Technology Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kingsignal Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Shenzhen AV Display

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen AV Display Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Shenzhen is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kingsignal Technology and Shenzhen

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

The idea behind Kingsignal Technology Co and Shenzhen AV Display Co 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.