Correlation Between Central Bank and Kingfa Science

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

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

Diversification Opportunities for Central Bank and Kingfa Science

0.63

Correlation Coefficient

Central Bank  Kingfa Science

Poor diversification

The 3 months correlation between Central and Kingfa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Central Bank of 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 Central Bank 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 Central Bank of 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 Central Bank i.e., Central Bank and Kingfa Science go up and down completely randomly.

Pair Corralation between Central Bank and Kingfa Science

Assuming the 90 days trading horizon Central Bank is expected to generate 1.41 times less return on investment than Kingfa Science. But when comparing it to its historical volatility, Central Bank of is 1.01 times less risky than Kingfa Science. It trades about 0.06 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  124,562  in Kingfa Science Technology on September 26, 2024 and sell it today you would earn a total of  225,213  from holding Kingfa Science Technology or generate 180.8% return on investment over 90 days.

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

Central Bank of  vs.  Kingfa Science Technology

Central Bank

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Central Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's essential indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the company institutional investors.

Kingfa Science Technology

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Kingfa Science may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Central Bank and Kingfa Science

The main advantage of trading using opposite Central Bank and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Bank 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 Central Bank of 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.