Correlation Between Kingfa Science and Engineers India

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

Diversification Opportunities for Kingfa Science and Engineers India

0.78

Correlation Coefficient

Kingfa Science  Engineers India

Poor diversification

The 3 months correlation between Kingfa and Engineers is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Engineers India Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Engineers 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 Engineers India. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Engineers India has no effect on the direction of Kingfa Science i.e., Kingfa Science and Engineers India go up and down completely randomly.

Pair Corralation between Kingfa Science and Engineers India

Assuming the 90 days trading horizon Kingfa Science Technology is expected to under-perform the Engineers India. In addition to that, Kingfa Science is 1.02 times more volatile than Engineers India Limited. It trades about -0.09 of its total potential returns per unit of risk. Engineers India Limited is currently generating about -0.07 per unit of volatility. If you would invest  18,618  in Engineers India Limited on December 27, 2024 and sell it today you would lose (2,983) from holding Engineers India Limited or give up 16.02% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.39%
Values	Daily Returns

Kingfa Science Technology  vs.  Engineers India Limited

Kingfa Science Technology

Risk-Adjusted Performance

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 weak performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Engineers India

Risk-Adjusted Performance

Very Weak

Over the last 90 days Engineers India Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Kingfa Science and Engineers India

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

The idea behind Kingfa Science Technology and Engineers India 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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.