Correlation Between Kingfa Science and Indo Rama

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

Diversification Opportunities for Kingfa Science and Indo Rama

0.49

Correlation Coefficient

Kingfa Science  Indo Rama

Very weak diversification

The 3 months correlation between Kingfa and Indo is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Indo Rama Synthetics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Indo Rama Synthetics 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 Indo Rama. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Indo Rama Synthetics has no effect on the direction of Kingfa Science i.e., Kingfa Science and Indo Rama go up and down completely randomly.

Pair Corralation between Kingfa Science and Indo Rama

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.04 times more return on investment than Indo Rama. However, Kingfa Science is 1.04 times more volatile than Indo Rama Synthetics. It trades about 0.07 of its potential returns per unit of risk. Indo Rama Synthetics is currently generating about 0.0 per unit of risk. If you would invest  187,865  in Kingfa Science Technology on October 3, 2024 and sell it today you would earn a total of  165,220  from holding Kingfa Science Technology or generate 87.95% 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.  Indo Rama Synthetics

Kingfa Science Technology

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Kingfa Science may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Indo Rama Synthetics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Indo Rama Synthetics 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 basic 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 Indo Rama

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

The idea behind Kingfa Science Technology and Indo Rama Synthetics 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.