Correlation Between CICT Mobile and Kingsignal Technology

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

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

Diversification Opportunities for CICT Mobile and Kingsignal Technology

0.23

Correlation Coefficient

CICT Mobile  Kingsignal Technology

Modest diversification

The 3 months correlation between CICT and Kingsignal is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding CICT Mobile Communication and Kingsignal Technology Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsignal Technology and CICT Mobile 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 CICT Mobile Communication 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 CICT Mobile i.e., CICT Mobile and Kingsignal Technology go up and down completely randomly.

Pair Corralation between CICT Mobile and Kingsignal Technology

Assuming the 90 days trading horizon CICT Mobile Communication is expected to under-perform the Kingsignal Technology. But the stock apears to be less risky and, when comparing its historical volatility, CICT Mobile Communication is 2.68 times less risky than Kingsignal Technology. The stock trades about -0.09 of its potential returns per unit of risk. The Kingsignal Technology Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  939.00  in Kingsignal Technology Co on December 2, 2024 and sell it today you would earn a total of  76.00  from holding Kingsignal Technology Co or generate 8.09% return on investment over 90 days.

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

CICT Mobile Communication  vs.  Kingsignal Technology Co

CICT Mobile Communication

Risk-Adjusted Performance

Very Weak

Over the last 90 days CICT Mobile Communication has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Kingsignal Technology

Risk-Adjusted Performance

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.

Pair Trading with CICT Mobile and Kingsignal Technology

The main advantage of trading using opposite CICT Mobile and Kingsignal Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CICT Mobile 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 CICT Mobile Communication 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.