Correlation Between DiGiSPICE Technologies and Kingfa Science
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By analyzing existing cross correlation between DiGiSPICE Technologies Limited and Kingfa Science Technology, you can compare the effects of market volatilities on DiGiSPICE Technologies 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 DiGiSPICE Technologies with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of DiGiSPICE Technologies and Kingfa Science.
Diversification Opportunities for DiGiSPICE Technologies and Kingfa Science
0.45 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DiGiSPICE and Kingfa is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding DiGiSPICE Technologies Limited 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 DiGiSPICE 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 DiGiSPICE Technologies Limited 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 DiGiSPICE Technologies i.e., DiGiSPICE Technologies and Kingfa Science go up and down completely randomly.
Pair Corralation between DiGiSPICE Technologies and Kingfa Science
Assuming the 90 days trading horizon DiGiSPICE Technologies Limited is expected to under-perform the Kingfa Science. But the stock apears to be less risky and, when comparing its historical volatility, DiGiSPICE Technologies Limited is 1.18 times less risky than Kingfa Science. The stock trades about -0.35 of its potential returns per unit of risk. The Kingfa Science Technology is currently generating about -0.15 of returns per unit of risk over similar time horizon. If you would invest 339,915 in Kingfa Science Technology on October 29, 2024 and sell it today you would lose (41,465) from holding Kingfa Science Technology or give up 12.2% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DiGiSPICE Technologies Limited vs. Kingfa Science Technology
Performance |
| Timeline |
| DiGiSPICE Technologies |
| Kingfa Science Technology |
DiGiSPICE Technologies and Kingfa Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DiGiSPICE Technologies and Kingfa Science
The main advantage of trading using opposite DiGiSPICE Technologies and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DiGiSPICE Technologies 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 DiGiSPICE Technologies Limited 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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Check out your portfolio center.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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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