Correlation Between Kingwaytek Technology and Sysgration

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

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

Diversification Opportunities for Kingwaytek Technology and Sysgration

0.76

Correlation Coefficient

Kingwaytek Technology  Sysgration

Poor diversification

The 3 months correlation between Kingwaytek and Sysgration is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kingwaytek Technology Co and Sysgration in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sysgration and Kingwaytek 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 Kingwaytek Technology Co are associated (or correlated) with Sysgration. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sysgration has no effect on the direction of Kingwaytek Technology i.e., Kingwaytek Technology and Sysgration go up and down completely randomly.

Pair Corralation between Kingwaytek Technology and Sysgration

Assuming the 90 days trading horizon Kingwaytek Technology Co is expected to generate 0.65 times more return on investment than Sysgration. However, Kingwaytek Technology Co is 1.55 times less risky than Sysgration. It trades about 0.16 of its potential returns per unit of risk. Sysgration is currently generating about 0.0 per unit of risk. If you would invest  6,880  in Kingwaytek Technology Co on December 27, 2024 and sell it today you would earn a total of  890.00  from holding Kingwaytek Technology Co or generate 12.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.21%
Values	Daily Returns

Kingwaytek Technology Co  vs.  Sysgration

Kingwaytek Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingwaytek Technology Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Kingwaytek Technology showed solid returns over the last few months and may actually be approaching a breakup point.

Sysgration

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sysgration has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sysgration is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Kingwaytek Technology and Sysgration

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

The idea behind Kingwaytek Technology Co and Sysgration 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.