Correlation Between Smartgiant Technology and Kingclean Electric

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

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

Diversification Opportunities for Smartgiant Technology and Kingclean Electric

-0.11

Correlation Coefficient

Smartgiant Technology  Kingclean Electric

Good diversification

The 3 months correlation between Smartgiant and Kingclean is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding Smartgiant Technology Co and Kingclean Electric Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingclean Electric and Smartgiant 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 Smartgiant Technology Co are associated (or correlated) with Kingclean Electric. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingclean Electric has no effect on the direction of Smartgiant Technology i.e., Smartgiant Technology and Kingclean Electric go up and down completely randomly.

Pair Corralation between Smartgiant Technology and Kingclean Electric

Assuming the 90 days trading horizon Smartgiant Technology Co is expected to under-perform the Kingclean Electric. In addition to that, Smartgiant Technology is 1.23 times more volatile than Kingclean Electric Co. It trades about -0.07 of its total potential returns per unit of risk. Kingclean Electric Co is currently generating about 0.15 per unit of volatility. If you would invest  2,308  in Kingclean Electric Co on December 27, 2024 and sell it today you would earn a total of  495.00  from holding Kingclean Electric Co or generate 21.45% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.28%
Values	Daily Returns

Smartgiant Technology Co  vs.  Kingclean Electric Co

Smartgiant Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smartgiant Technology Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Kingclean Electric

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingclean Electric Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Kingclean Electric sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Smartgiant Technology and Kingclean Electric

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

The idea behind Smartgiant Technology Co and Kingclean Electric 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.