Correlation Between State Grid and Kingsignal Technology

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Can any of the company-specific risk be diversified away by investing in both State Grid and Kingsignal 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 State Grid and Kingsignal Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between State Grid InformationCommunication and Kingsignal Technology Co, you can compare the effects of market volatilities on State Grid and Kingsignal 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 State Grid with a short position of Kingsignal Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of State Grid and Kingsignal Technology.

Diversification Opportunities for State Grid and Kingsignal Technology

0.12
  Correlation Coefficient

Average diversification

The 3 months correlation between State and Kingsignal is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding State Grid InformationCommunic and Kingsignal Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsignal Technology and State Grid 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 State Grid InformationCommunication are associated (or correlated) with Kingsignal Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsignal Technology has no effect on the direction of State Grid i.e., State Grid and Kingsignal Technology go up and down completely randomly.

Pair Corralation between State Grid and Kingsignal Technology

Assuming the 90 days trading horizon State Grid InformationCommunication is expected to under-perform the Kingsignal Technology. But the stock apears to be less risky and, when comparing its historical volatility, State Grid InformationCommunication is 4.3 times less risky than Kingsignal Technology. The stock trades about -0.32 of its potential returns per unit of risk. The Kingsignal Technology Co is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  1,068  in Kingsignal Technology Co on October 25, 2024 and sell it today you would lose (70.00) from holding Kingsignal Technology Co or give up 6.55% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

State Grid InformationCommunic  vs.  Kingsignal Technology Co

 Performance 
       Timeline  
State Grid Informati 

Risk-Adjusted Performance

0 of 100

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

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Kingsignal Technology Co are ranked lower than 3 (%) 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.

State Grid and Kingsignal Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with State Grid and Kingsignal Technology

The main advantage of trading using opposite State Grid and Kingsignal Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if State Grid position performs unexpectedly, Kingsignal 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 Kingsignal Technology will offset losses from the drop in Kingsignal Technology's long position.
The idea behind State Grid InformationCommunication and Kingsignal Technology 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

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