Correlation Between Kingfa Science and G Tec

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

Diversification Opportunities for Kingfa Science and G Tec

0.35

Correlation Coefficient

Kingfa Science  G Tec

Weak diversification

The 3 months correlation between Kingfa and GTECJAINX is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and G Tec Jainx Education in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Tec Jainx 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 G Tec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Tec Jainx has no effect on the direction of Kingfa Science i.e., Kingfa Science and G Tec go up and down completely randomly.

Pair Corralation between Kingfa Science and G Tec

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 0.8 times more return on investment than G Tec. However, Kingfa Science Technology is 1.26 times less risky than G Tec. It trades about 0.29 of its potential returns per unit of risk. G Tec Jainx Education is currently generating about 0.1 per unit of risk. If you would invest  297,680  in Kingfa Science Technology on September 29, 2024 and sell it today you would earn a total of  44,835  from holding Kingfa Science Technology or generate 15.06% return on investment over 90 days.

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

Kingfa Science Technology  vs.  G Tec Jainx Education

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

G Tec Jainx

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Tec Jainx Education has generated negative risk-adjusted returns adding no value to investors with long positions. Despite inconsistent performance in the last few months, the Stock's forward indicators remain fairly strong which may send shares a bit higher in January 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Kingfa Science and G Tec

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

The idea behind Kingfa Science Technology and G Tec Jainx Education 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.