Correlation Between Kingfa Science and Agro Phos

Can any of the company-specific risk be diversified away by investing in both Kingfa Science and Agro Phos 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 Agro Phos 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 Agro Phos India, you can compare the effects of market volatilities on Kingfa Science and Agro Phos 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 Agro Phos. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and Agro Phos.

Diversification Opportunities for Kingfa Science and Agro Phos

-0.16

Correlation Coefficient

Kingfa Science  Agro Phos

Good diversification

The 3 months correlation between Kingfa and Agro is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Agro Phos India in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agro Phos India 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 Agro Phos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agro Phos India has no effect on the direction of Kingfa Science i.e., Kingfa Science and Agro Phos go up and down completely randomly.

Pair Corralation between Kingfa Science and Agro Phos

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.43 times more return on investment than Agro Phos. However, Kingfa Science is 1.43 times more volatile than Agro Phos India. It trades about 0.02 of its potential returns per unit of risk. Agro Phos India is currently generating about -0.13 per unit of risk. If you would invest  303,815  in Kingfa Science Technology on October 24, 2024 and sell it today you would earn a total of  1,960  from holding Kingfa Science Technology or generate 0.65% return on investment over 90 days.

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

Kingfa Science Technology  vs.  Agro Phos India

Kingfa Science Technology

Risk-Adjusted Performance

1 of 100

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 current stock price disturbance, may contribute to short-term losses for the investors.

Agro Phos India

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agro Phos India has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Kingfa Science and Agro Phos

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

The idea behind Kingfa Science Technology and Agro Phos India 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.