Correlation Between Kingfa Science and Landmark Cars

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

Diversification Opportunities for Kingfa Science and Landmark Cars

0.84

Correlation Coefficient

Kingfa Science  Landmark Cars

Very poor diversification

The 3 months correlation between Kingfa and Landmark is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Landmark Cars Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landmark Cars 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 Landmark Cars. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landmark Cars Limited has no effect on the direction of Kingfa Science i.e., Kingfa Science and Landmark Cars go up and down completely randomly.

Pair Corralation between Kingfa Science and Landmark Cars

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.05 times more return on investment than Landmark Cars. However, Kingfa Science is 1.05 times more volatile than Landmark Cars Limited. It trades about -0.09 of its potential returns per unit of risk. Landmark Cars Limited is currently generating about -0.24 per unit of risk. If you would invest  342,515  in Kingfa Science Technology on December 27, 2024 and sell it today you would lose (61,980) from holding Kingfa Science Technology or give up 18.1% of portfolio value over 90 days.

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

Kingfa Science Technology  vs.  Landmark Cars 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.

Landmark Cars Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days Landmark Cars Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with uncertain 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 Landmark Cars

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

The idea behind Kingfa Science Technology and Landmark Cars 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.

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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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.