Correlation Between Kingfa Science and 360 ONE

Can any of the company-specific risk be diversified away by investing in both Kingfa Science and 360 ONE 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 Kingfa Science and 360 ONE into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingfa Science Technology and 360 ONE WAM, you can compare the effects of market volatilities on Kingfa Science and 360 ONE 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 Kingfa Science with a short position of 360 ONE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and 360 ONE.

Diversification Opportunities for Kingfa Science and 360 ONE

0.43

Correlation Coefficient

Kingfa Science  360 ONE

Very weak diversification

The 3 months correlation between Kingfa and 360 is 0.43. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and 360 ONE WAM in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on 360 ONE WAM and Kingfa Science 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 Kingfa Science Technology are associated (or correlated) with 360 ONE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of 360 ONE WAM has no effect on the direction of Kingfa Science i.e., Kingfa Science and 360 ONE go up and down completely randomly.

Pair Corralation between Kingfa Science and 360 ONE

Assuming the 90 days trading horizon Kingfa Science is expected to generate 4.88 times less return on investment than 360 ONE. But when comparing it to its historical volatility, Kingfa Science Technology is 1.11 times less risky than 360 ONE. It trades about 0.05 of its potential returns per unit of risk. 360 ONE WAM is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  95,545  in 360 ONE WAM on October 2, 2024 and sell it today you would earn a total of  31,550  from holding 360 ONE WAM or generate 33.02% return on investment over 90 days.

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

Kingfa Science Technology  vs.  360 ONE WAM

Kingfa Science Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 3 (%) 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.

360 ONE WAM

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in 360 ONE WAM are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, 360 ONE sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingfa Science and 360 ONE

The main advantage of trading using opposite Kingfa Science and 360 ONE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingfa Science position performs unexpectedly, 360 ONE 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 360 ONE will offset losses from the drop in 360 ONE's long position.

The idea behind Kingfa Science Technology and 360 ONE WAM 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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.