Correlation Between India Glycols and Kingfa Science

Can any of the company-specific risk be diversified away by investing in both India Glycols and Kingfa Science at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining India Glycols and Kingfa Science into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between India Glycols Limited and Kingfa Science Technology, you can compare the effects of market volatilities on India Glycols 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 India Glycols with a short position of Kingfa Science. Check out your portfolio center. Please also check ongoing floating volatility patterns of India Glycols and Kingfa Science.

Diversification Opportunities for India Glycols and Kingfa Science

0.63

Correlation Coefficient

India Glycols  Kingfa Science

Poor diversification

The 3 months correlation between India and Kingfa is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding India Glycols 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 India Glycols 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 India Glycols 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 India Glycols i.e., India Glycols and Kingfa Science go up and down completely randomly.

Pair Corralation between India Glycols and Kingfa Science

Assuming the 90 days trading horizon India Glycols Limited is expected to generate 1.15 times more return on investment than Kingfa Science. However, India Glycols is 1.15 times more volatile than Kingfa Science Technology. It trades about 0.15 of its potential returns per unit of risk. Kingfa Science Technology is currently generating about 0.16 per unit of risk. If you would invest  142,180  in India Glycols Limited on April 25, 2025 and sell it today you would earn a total of  35,060  from holding India Glycols Limited or generate 24.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

India Glycols Limited  vs.  Kingfa Science Technology

India Glycols Limited

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in India Glycols Limited are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady basic indicators, India Glycols disclosed solid returns over the last few months and may actually be approaching a breakup point.

Kingfa Science Technology

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain technical and fundamental indicators, Kingfa Science sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with India Glycols and Kingfa Science

The main advantage of trading using opposite India Glycols and Kingfa Science positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if India Glycols 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.

The idea behind India Glycols Limited and Kingfa Science Technology pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..