Correlation Between Kingfa Science and Golden Tobacco
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By analyzing existing cross correlation between Kingfa Science Technology and Golden Tobacco Limited, you can compare the effects of market volatilities on Kingfa Science and Golden Tobacco 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 Golden Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and Golden Tobacco.
Diversification Opportunities for Kingfa Science and Golden Tobacco
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Kingfa and Golden is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Golden Tobacco Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Golden Tobacco 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 Golden Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Golden Tobacco has no effect on the direction of Kingfa Science i.e., Kingfa Science and Golden Tobacco go up and down completely randomly.
Pair Corralation between Kingfa Science and Golden Tobacco
Assuming the 90 days trading horizon Kingfa Science Technology is expected to under-perform the Golden Tobacco. But the stock apears to be less risky and, when comparing its historical volatility, Kingfa Science Technology is 1.02 times less risky than Golden Tobacco. The stock trades about -0.04 of its potential returns per unit of risk. The Golden Tobacco Limited is currently generating about -0.02 of returns per unit of risk over similar time horizon. If you would invest 4,191 in Golden Tobacco Limited on September 12, 2024 and sell it today you would lose (191.00) from holding Golden Tobacco Limited or give up 4.56% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingfa Science Technology vs. Golden Tobacco Limited
Performance |
| Timeline |
| Kingfa Science Technology |
| Golden Tobacco |
Kingfa Science and Golden Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingfa Science and Golden Tobacco
The main advantage of trading using opposite Kingfa Science and Golden Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingfa Science position performs unexpectedly, Golden Tobacco 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 Golden Tobacco will offset losses from the drop in Golden Tobacco's long position.| Kingfa Science vs. Steel Authority of | Kingfa Science vs. Embassy Office Parks | Kingfa Science vs. Indian Metals Ferro | Kingfa Science vs. JTL Industries |
| Golden Tobacco vs. Indo Borax Chemicals | Golden Tobacco vs. Kingfa Science Technology | Golden Tobacco vs. Alkali Metals Limited | Golden Tobacco vs. Krebs Biochemicals and |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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