Correlation Between SAL Steel and Kingfa Science
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By analyzing existing cross correlation between SAL Steel Limited and Kingfa Science Technology, you can compare the effects of market volatilities on SAL Steel 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 SAL Steel with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of SAL Steel and Kingfa Science.
Diversification Opportunities for SAL Steel and Kingfa Science
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between SAL and Kingfa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding SAL Steel 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 SAL Steel 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 SAL Steel 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 SAL Steel i.e., SAL Steel and Kingfa Science go up and down completely randomly.
Pair Corralation between SAL Steel and Kingfa Science
Assuming the 90 days trading horizon SAL Steel is expected to generate 1.07 times less return on investment than Kingfa Science. In addition to that, SAL Steel is 1.1 times more volatile than Kingfa Science Technology. It trades about 0.05 of its total potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.06 per unit of volatility. If you would invest 225,143 in Kingfa Science Technology on September 15, 2024 and sell it today you would earn a total of 92,312 from holding Kingfa Science Technology or generate 41.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SAL Steel Limited vs. Kingfa Science Technology
Performance |
| Timeline |
| SAL Steel Limited |
| Kingfa Science Technology |
SAL Steel and Kingfa Science Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SAL Steel and Kingfa Science
The main advantage of trading using opposite SAL Steel and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SAL Steel 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.| SAL Steel vs. NMDC Limited | SAL Steel vs. Steel Authority of | SAL Steel vs. Embassy Office Parks | SAL Steel vs. Gujarat Narmada Valley |
| Kingfa Science vs. Steel Authority of | Kingfa Science vs. SAL Steel Limited | Kingfa Science vs. UTI Asset Management | Kingfa Science vs. Manaksia 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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