Correlation Between Kingfa Science and Sarthak Metals

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

Diversification Opportunities for Kingfa Science and Sarthak Metals

0.47

Correlation Coefficient

Kingfa Science  Sarthak Metals

Very weak diversification

The 3 months correlation between Kingfa and Sarthak is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Sarthak Metals Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sarthak Metals 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 Sarthak Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sarthak Metals has no effect on the direction of Kingfa Science i.e., Kingfa Science and Sarthak Metals go up and down completely randomly.

Pair Corralation between Kingfa Science and Sarthak Metals

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 0.6 times more return on investment than Sarthak Metals. However, Kingfa Science Technology is 1.66 times less risky than Sarthak Metals. It trades about 0.0 of its potential returns per unit of risk. Sarthak Metals Limited is currently generating about -0.03 per unit of risk. If you would invest  337,405  in Kingfa Science Technology on September 5, 2024 and sell it today you would lose (6,455) from holding Kingfa Science Technology or give up 1.91% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.41%
Values	Daily Returns

Kingfa Science Technology  vs.  Sarthak Metals Limited

Kingfa Science Technology

Risk-Adjusted Performance

0 of 100

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 somewhat strong technical and fundamental indicators, Kingfa Science is not utilizing all of its potentials. The newest stock price disturbance, may contribute to short-term losses for the investors.

Sarthak Metals

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Sarthak Metals Limited has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Kingfa Science and Sarthak Metals

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

The idea behind Kingfa Science Technology and Sarthak Metals 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 CEOs Directory module to screen CEOs from public companies around the world.