Correlation Between Kingfa Science and Megastar Foods
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By analyzing existing cross correlation between Kingfa Science Technology and Megastar Foods Limited, you can compare the effects of market volatilities on Kingfa Science and Megastar Foods 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 Megastar Foods. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and Megastar Foods.
Diversification Opportunities for Kingfa Science and Megastar Foods
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Kingfa and Megastar is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Megastar Foods Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Megastar Foods 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 Megastar Foods. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Megastar Foods has no effect on the direction of Kingfa Science i.e., Kingfa Science and Megastar Foods go up and down completely randomly.
Pair Corralation between Kingfa Science and Megastar Foods
Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.53 times more return on investment than Megastar Foods. However, Kingfa Science is 1.53 times more volatile than Megastar Foods Limited. It trades about -0.02 of its potential returns per unit of risk. Megastar Foods Limited is currently generating about -0.49 per unit of risk. If you would invest 315,550 in Kingfa Science Technology on September 1, 2024 and sell it today you would lose (4,340) from holding Kingfa Science Technology or give up 1.38% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Kingfa Science Technology vs. Megastar Foods Limited
Performance |
| Timeline |
| Kingfa Science Technology |
| Megastar Foods |
Kingfa Science and Megastar Foods Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Kingfa Science and Megastar Foods
The main advantage of trading using opposite Kingfa Science and Megastar Foods positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingfa Science position performs unexpectedly, Megastar Foods 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 Megastar Foods will offset losses from the drop in Megastar Foods' long position.| Kingfa Science vs. Kewal Kiran Clothing | Kingfa Science vs. Elin Electronics Limited | Kingfa Science vs. Vraj Iron and | Kingfa Science vs. Kalyani Steels Limited |
| Megastar Foods vs. Kingfa Science Technology | Megastar Foods vs. Rico Auto Industries | Megastar Foods vs. GACM Technologies Limited | Megastar Foods vs. COSMO FIRST LIMITED |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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