Correlation Between GPT Healthcare and Kingfa Science

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Can any of the company-specific risk be diversified away by investing in both GPT Healthcare 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 GPT Healthcare and Kingfa Science into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GPT Healthcare and Kingfa Science Technology, you can compare the effects of market volatilities on GPT Healthcare 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 GPT Healthcare with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of GPT Healthcare and Kingfa Science.

Diversification Opportunities for GPT Healthcare and Kingfa Science

GPTKingfaDiversified AwayGPTKingfaDiversified Away100%
0.66
  Correlation Coefficient

Poor diversification

The 3 months correlation between GPT and Kingfa is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding GPT Healthcare 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 GPT Healthcare 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 GPT Healthcare 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 GPT Healthcare i.e., GPT Healthcare and Kingfa Science go up and down completely randomly.

Pair Corralation between GPT Healthcare and Kingfa Science

Assuming the 90 days trading horizon GPT Healthcare is expected to under-perform the Kingfa Science. But the stock apears to be less risky and, when comparing its historical volatility, GPT Healthcare is 1.15 times less risky than Kingfa Science. The stock trades about -0.01 of its potential returns per unit of risk. The Kingfa Science Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  230,627  in Kingfa Science Technology on October 27, 2024 and sell it today you would earn a total of  67,823  from holding Kingfa Science Technology or generate 29.41% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy78.95%
ValuesDaily Returns

GPT Healthcare  vs.  Kingfa Science Technology

 Performance 
JavaScript chart by amCharts 3.21.15NovDec2025 -50510152025
JavaScript chart by amCharts 3.21.15GPTHEALTH KINGFA
       Timeline  
GPT Healthcare 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in GPT Healthcare are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite abnormal essential indicators, GPT Healthcare may actually be approaching a critical reversion point that can send shares even higher in February 2025.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan160165170175180185190
Kingfa Science Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Kingfa Science Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Kingfa Science is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15NovDecJanDecJan2,8003,0003,2003,4003,6003,8004,000

GPT Healthcare and Kingfa Science Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-5.82-4.36-2.9-1.440.02511.482.994.496.0 0.020.040.060.080.100.12
JavaScript chart by amCharts 3.21.15GPTHEALTH KINGFA
       Returns  

Pair Trading with GPT Healthcare and Kingfa Science

The main advantage of trading using opposite GPT Healthcare and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GPT Healthcare 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 GPT Healthcare 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 Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.

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