Correlation Between Megastar Foods and Kingfa Science
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By analyzing existing cross correlation between Megastar Foods Limited and Kingfa Science Technology, you can compare the effects of market volatilities on Megastar Foods 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 Megastar Foods with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Megastar Foods and Kingfa Science.
Diversification Opportunities for Megastar Foods and Kingfa Science
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Megastar and Kingfa is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Megastar Foods 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 Megastar Foods 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 Megastar Foods 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 Megastar Foods i.e., Megastar Foods and Kingfa Science go up and down completely randomly.
Pair Corralation between Megastar Foods and Kingfa Science
Assuming the 90 days trading horizon Megastar Foods Limited is expected to generate 1.06 times more return on investment than Kingfa Science. However, Megastar Foods is 1.06 times more volatile than Kingfa Science Technology. It trades about -0.02 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about -0.09 per unit of risk. If you would invest 22,165 in Megastar Foods Limited on November 30, 2024 and sell it today you would lose (1,451) from holding Megastar Foods Limited or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Megastar Foods Limited vs. Kingfa Science Technology
Performance |
| Timeline |
| Megastar Foods |
| Kingfa Science Technology |
Megastar Foods and Kingfa Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Megastar Foods and Kingfa Science
The main advantage of trading using opposite Megastar Foods and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Megastar Foods 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.| Megastar Foods vs. Union Bank of | Megastar Foods vs. IDFC First Bank | Megastar Foods vs. SBI Life Insurance | Megastar Foods vs. Bhagiradha Chemicals Industries |
| Kingfa Science vs. Computer Age Management | Kingfa Science vs. Syrma SGS Technology | Kingfa Science vs. SIL Investments Limited | Kingfa Science vs. Tera Software 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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