Correlation Between TKS Technologies and Kingsmen CMTI

Can any of the company-specific risk be diversified away by investing in both TKS Technologies and Kingsmen CMTI 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 TKS Technologies and Kingsmen CMTI into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between TKS Technologies Public and Kingsmen CMTI Public, you can compare the effects of market volatilities on TKS Technologies and Kingsmen CMTI 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 TKS Technologies with a short position of Kingsmen CMTI. Check out your portfolio center. Please also check ongoing floating volatility patterns of TKS Technologies and Kingsmen CMTI.

Diversification Opportunities for TKS Technologies and Kingsmen CMTI

0.81

Correlation Coefficient

TKS Technologies  Kingsmen CMTI

Very poor diversification

The 3 months correlation between TKS and Kingsmen is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding TKS Technologies Public and Kingsmen CMTI Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kingsmen CMTI Public and TKS Technologies 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 TKS Technologies Public are associated (or correlated) with Kingsmen CMTI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kingsmen CMTI Public has no effect on the direction of TKS Technologies i.e., TKS Technologies and Kingsmen CMTI go up and down completely randomly.

Pair Corralation between TKS Technologies and Kingsmen CMTI

Assuming the 90 days trading horizon TKS Technologies is expected to generate 1.03 times less return on investment than Kingsmen CMTI. In addition to that, TKS Technologies is 1.0 times more volatile than Kingsmen CMTI Public. It trades about 0.12 of its total potential returns per unit of risk. Kingsmen CMTI Public is currently generating about 0.13 per unit of volatility. If you would invest  0.00  in Kingsmen CMTI Public on September 3, 2024 and sell it today you would earn a total of  126.00  from holding Kingsmen CMTI Public or generate 9.223372036854776E16% return on investment over 90 days.

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

TKS Technologies Public  vs.  Kingsmen CMTI Public

TKS Technologies Public

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in TKS Technologies Public are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, TKS Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Kingsmen CMTI Public

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingsmen CMTI Public are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting fundamental drivers, Kingsmen CMTI disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with TKS Technologies and Kingsmen CMTI

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

The idea behind TKS Technologies Public and Kingsmen CMTI Public 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.