Correlation Between Bikaji Foods and Kingfa Science

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

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

Diversification Opportunities for Bikaji Foods and Kingfa Science

-0.29

Correlation Coefficient

Bikaji Foods  Kingfa Science

Very good diversification

The 3 months correlation between Bikaji and Kingfa is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Bikaji Foods International and Kingfa Science Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfa Science Technology and Bikaji Foods 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 Bikaji Foods International are associated (or correlated) with Kingfa Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfa Science Technology has no effect on the direction of Bikaji Foods i.e., Bikaji Foods and Kingfa Science go up and down completely randomly.

Pair Corralation between Bikaji Foods and Kingfa Science

Assuming the 90 days trading horizon Bikaji Foods International is expected to generate 0.44 times more return on investment than Kingfa Science. However, Bikaji Foods International is 2.27 times less risky than Kingfa Science. It trades about -0.37 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about -0.2 per unit of risk. If you would invest  78,135  in Bikaji Foods International on October 25, 2024 and sell it today you would lose (9,300) from holding Bikaji Foods International or give up 11.9% of portfolio value over 90 days.

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

Bikaji Foods International  vs.  Kingfa Science Technology

Bikaji Foods Interna

Risk-Adjusted Performance

0 of 100

Very Weak

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

Kingfa Science Technology

Risk-Adjusted Performance

1 of 100

Very Weak

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

Pair Trading with Bikaji Foods and Kingfa Science

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

The idea behind Bikaji Foods International and Kingfa Science Technology 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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.