Correlation Between Gokul Refoils and Kingfa Science

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

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

Diversification Opportunities for Gokul Refoils and Kingfa Science

0.52

Correlation Coefficient

Gokul Refoils  Kingfa Science

Very weak diversification

The 3 months correlation between Gokul and Kingfa is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Gokul Refoils and 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 Gokul Refoils 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 Gokul Refoils and 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 Gokul Refoils i.e., Gokul Refoils and Kingfa Science go up and down completely randomly.

Pair Corralation between Gokul Refoils and Kingfa Science

Assuming the 90 days trading horizon Gokul Refoils and is expected to generate 1.08 times more return on investment than Kingfa Science. However, Gokul Refoils is 1.08 times more volatile than Kingfa Science Technology. It trades about 0.07 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.05 per unit of risk. If you would invest  3,030  in Gokul Refoils and on October 22, 2024 and sell it today you would earn a total of  2,812  from holding Gokul Refoils and or generate 92.81% return on investment over 90 days.

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

Gokul Refoils and  vs.  Kingfa Science Technology

Gokul Refoils

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gokul Refoils and are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward-looking signals, Gokul Refoils displayed solid returns over the last few months and may actually be approaching a breakup point.

Kingfa Science Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 2 (%) 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 February 2025.

Pair Trading with Gokul Refoils and Kingfa Science

The main advantage of trading using opposite Gokul Refoils and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gokul Refoils 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 Gokul Refoils and 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.

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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.