Correlation Between Steel Authority and Kingfa Science
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By analyzing existing cross correlation between Steel Authority of and Kingfa Science Technology, you can compare the effects of market volatilities on Steel Authority 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 Steel Authority with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of Steel Authority and Kingfa Science.
Diversification Opportunities for Steel Authority and Kingfa Science
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Steel and Kingfa is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Steel Authority of 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 Steel Authority 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 Steel Authority of 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 Steel Authority i.e., Steel Authority and Kingfa Science go up and down completely randomly.
Pair Corralation between Steel Authority and Kingfa Science
Assuming the 90 days trading horizon Steel Authority of is expected to generate 1.11 times more return on investment than Kingfa Science. However, Steel Authority is 1.11 times more volatile than Kingfa Science Technology. It trades about 0.04 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about -0.02 per unit of risk. If you would invest 11,575 in Steel Authority of on September 1, 2024 and sell it today you would earn a total of 136.00 from holding Steel Authority of or generate 1.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Steel Authority of vs. Kingfa Science Technology
Performance |
| Timeline |
| Steel Authority |
| Kingfa Science Technology |
Steel Authority and Kingfa Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Steel Authority and Kingfa Science
The main advantage of trading using opposite Steel Authority and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Steel Authority 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.| Steel Authority vs. NMDC Limited | Steel Authority vs. Embassy Office Parks | Steel Authority vs. Gujarat Narmada Valley | Steel Authority vs. Gujarat Alkalies and |
| Kingfa Science vs. Kewal Kiran Clothing | Kingfa Science vs. Elin Electronics Limited | Kingfa Science vs. Vraj Iron and | Kingfa Science vs. Kalyani Steels 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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