Correlation Between Kingfa Science and Maharashtra Scooters

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

Diversification Opportunities for Kingfa Science and Maharashtra Scooters

0.0

Correlation Coefficient

Kingfa Science  Maharashtra Scooters

Pay attention - limited upside

The 3 months correlation between Kingfa and Maharashtra is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Maharashtra Scooters Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maharashtra Scooters 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 Maharashtra Scooters. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maharashtra Scooters has no effect on the direction of Kingfa Science i.e., Kingfa Science and Maharashtra Scooters go up and down completely randomly.

Pair Corralation between Kingfa Science and Maharashtra Scooters

Assuming the 90 days trading horizon Kingfa Science Technology is expected to under-perform the Maharashtra Scooters. In addition to that, Kingfa Science is 1.34 times more volatile than Maharashtra Scooters Limited. It trades about -0.06 of its total potential returns per unit of risk. Maharashtra Scooters Limited is currently generating about 0.11 per unit of volatility. If you would invest  967,720  in Maharashtra Scooters Limited on December 29, 2024 and sell it today you would earn a total of  154,730  from holding Maharashtra Scooters Limited or generate 15.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Kingfa Science Technology  vs.  Maharashtra Scooters 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 latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Maharashtra Scooters

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Maharashtra Scooters Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of very unsteady basic indicators, Maharashtra Scooters displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Kingfa Science and Maharashtra Scooters

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

The idea behind Kingfa Science Technology and Maharashtra Scooters 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 Stocks Directory module to find actively traded stocks across global markets.