Correlation Between Kingfa Science and Aptech

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

Diversification Opportunities for Kingfa Science and Aptech

0.53

Correlation Coefficient

Kingfa Science  Aptech

Very weak diversification

The 3 months correlation between Kingfa and Aptech is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Aptech Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Aptech Limited 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 Aptech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Aptech Limited has no effect on the direction of Kingfa Science i.e., Kingfa Science and Aptech go up and down completely randomly.

Pair Corralation between Kingfa Science and Aptech

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 0.73 times more return on investment than Aptech. However, Kingfa Science Technology is 1.37 times less risky than Aptech. It trades about 0.2 of its potential returns per unit of risk. Aptech Limited is currently generating about 0.08 per unit of risk. If you would invest  333,035  in Kingfa Science Technology on October 6, 2024 and sell it today you would earn a total of  32,315  from holding Kingfa Science Technology or generate 9.7% 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.  Aptech Limited

Kingfa Science Technology

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Kingfa Science sustained solid returns over the last few months and may actually be approaching a breakup point.

Aptech Limited

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Aptech Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's fundamental indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kingfa Science and Aptech

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

The idea behind Kingfa Science Technology and Aptech Limited 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.