Correlation Between Kingfa Science and Healthcare Global

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

Diversification Opportunities for Kingfa Science and Healthcare Global

0.3

Correlation Coefficient

Kingfa Science  Healthcare Global

Weak diversification

The 3 months correlation between Kingfa and Healthcare is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Healthcare Global Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthcare Global 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 Healthcare Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthcare Global has no effect on the direction of Kingfa Science i.e., Kingfa Science and Healthcare Global go up and down completely randomly.

Pair Corralation between Kingfa Science and Healthcare Global

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.66 times more return on investment than Healthcare Global. However, Kingfa Science is 1.66 times more volatile than Healthcare Global Enterprises. It trades about 0.08 of its potential returns per unit of risk. Healthcare Global Enterprises is currently generating about 0.08 per unit of risk. If you would invest  126,651  in Kingfa Science Technology on October 20, 2024 and sell it today you would earn a total of  184,634  from holding Kingfa Science Technology or generate 145.78% 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.  Healthcare Global Enterprises

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.

Healthcare Global

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Healthcare Global Enterprises are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather unsteady technical and fundamental indicators, Healthcare Global exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingfa Science and Healthcare Global

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

The idea behind Kingfa Science Technology and Healthcare Global Enterprises 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.