Correlation Between Mcnally Bharat and Kingfa Science

Can any of the company-specific risk be diversified away by investing in both Mcnally Bharat and Kingfa Science 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 Mcnally Bharat and Kingfa Science into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mcnally Bharat Engineering and Kingfa Science Technology, you can compare the effects of market volatilities on Mcnally Bharat and Kingfa Science 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 Mcnally Bharat with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mcnally Bharat and Kingfa Science.

Diversification Opportunities for Mcnally Bharat and Kingfa Science

-0.09

Correlation Coefficient

Mcnally Bharat  Kingfa Science

Good diversification

The 3 months correlation between Mcnally and Kingfa is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Mcnally Bharat Engineering and Kingfa Science Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingfa Science Technology and Mcnally Bharat 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 Mcnally Bharat Engineering are associated (or correlated) with Kingfa Science. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingfa Science Technology has no effect on the direction of Mcnally Bharat i.e., Mcnally Bharat and Kingfa Science go up and down completely randomly.

Pair Corralation between Mcnally Bharat and Kingfa Science

Assuming the 90 days trading horizon Mcnally Bharat Engineering is expected to under-perform the Kingfa Science. In addition to that, Mcnally Bharat is 6.4 times more volatile than Kingfa Science Technology. It trades about -0.18 of its total potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.22 per unit of volatility. If you would invest  329,770  in Kingfa Science Technology on October 10, 2024 and sell it today you would earn a total of  48,485  from holding Kingfa Science Technology or generate 14.7% return on investment over 90 days.

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

Mcnally Bharat Engineering  vs.  Kingfa Science Technology

Mcnally Bharat Engin

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Mcnally Bharat Engineering are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of very weak technical and fundamental indicators, Mcnally Bharat displayed solid returns over the last few months and may actually be approaching a breakup point.

Kingfa Science Technology

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Kingfa Science sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Mcnally Bharat and Kingfa Science

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

The idea behind Mcnally Bharat Engineering and Kingfa Science Technology 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.