Correlation Between Kingfa Science and SECUREKLOUD TECHNOLOGIES

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

Diversification Opportunities for Kingfa Science and SECUREKLOUD TECHNOLOGIES

0.76

Correlation Coefficient

Kingfa Science  SECUREKLOUD TECHNOLOGIES

Poor diversification

The 3 months correlation between Kingfa and SECUREKLOUD is 0.76. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and SECUREKLOUD TECHNOLOGIES LIMIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SECUREKLOUD TECHNOLOGIES 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 SECUREKLOUD TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SECUREKLOUD TECHNOLOGIES has no effect on the direction of Kingfa Science i.e., Kingfa Science and SECUREKLOUD TECHNOLOGIES go up and down completely randomly.

Pair Corralation between Kingfa Science and SECUREKLOUD TECHNOLOGIES

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 0.95 times more return on investment than SECUREKLOUD TECHNOLOGIES. However, Kingfa Science Technology is 1.05 times less risky than SECUREKLOUD TECHNOLOGIES. It trades about -0.06 of its potential returns per unit of risk. SECUREKLOUD TECHNOLOGIES LIMITED is currently generating about -0.27 per unit of risk. If you would invest  339,915  in Kingfa Science Technology on December 28, 2024 and sell it today you would lose (44,985) from holding Kingfa Science Technology or give up 13.23% of portfolio value over 90 days.

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

Kingfa Science Technology  vs.  SECUREKLOUD TECHNOLOGIES LIMIT

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.

SECUREKLOUD TECHNOLOGIES

Risk-Adjusted Performance

Very Weak

Over the last 90 days SECUREKLOUD TECHNOLOGIES LIMITED 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 basic indicators remain quite persistent which may send shares a bit higher in April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Kingfa Science and SECUREKLOUD TECHNOLOGIES

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

The idea behind Kingfa Science Technology and SECUREKLOUD TECHNOLOGIES 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.