Correlation Between Kingfa Science and Shigan Quantum

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

Diversification Opportunities for Kingfa Science and Shigan Quantum

-0.56

Correlation Coefficient

Kingfa Science  Shigan Quantum

Excellent diversification

The 3 months correlation between Kingfa and Shigan is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Shigan Quantum Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shigan Quantum Tech 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 Shigan Quantum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shigan Quantum Tech has no effect on the direction of Kingfa Science i.e., Kingfa Science and Shigan Quantum go up and down completely randomly.

Pair Corralation between Kingfa Science and Shigan Quantum

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 0.8 times more return on investment than Shigan Quantum. However, Kingfa Science Technology is 1.25 times less risky than Shigan Quantum. It trades about 0.08 of its potential returns per unit of risk. Shigan Quantum Tech is currently generating about 0.0 per unit of risk. If you would invest  136,134  in Kingfa Science Technology on October 9, 2024 and sell it today you would earn a total of  214,846  from holding Kingfa Science Technology or generate 157.82% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	9.65%
Values	Daily Returns

Kingfa Science Technology  vs.  Shigan Quantum Tech

Kingfa Science Technology

Risk-Adjusted Performance

4 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat abnormal technical and fundamental indicators, Kingfa Science may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Shigan Quantum Tech

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Shigan Quantum Tech has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shigan Quantum is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Kingfa Science and Shigan Quantum

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

The idea behind Kingfa Science Technology and Shigan Quantum Tech 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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.