Correlation Between Kingfa Science and S P

Can any of the company-specific risk be diversified away by investing in both Kingfa Science and S P 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 Kingfa Science and S P into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingfa Science Technology and S P Apparels, you can compare the effects of market volatilities on Kingfa Science and S P 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 S P. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and S P.

Diversification Opportunities for Kingfa Science and S P

0.39

Correlation Coefficient

Kingfa Science  S P

Weak diversification

The 3 months correlation between Kingfa and SPAL is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and S P Apparels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on S P Apparels 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 S P. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of S P Apparels has no effect on the direction of Kingfa Science i.e., Kingfa Science and S P go up and down completely randomly.

Pair Corralation between Kingfa Science and S P

Assuming the 90 days trading horizon Kingfa Science is expected to generate 1.39 times less return on investment than S P. But when comparing it to its historical volatility, Kingfa Science Technology is 1.31 times less risky than S P. It trades about 0.06 of its potential returns per unit of risk. S P Apparels is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  73,625  in S P Apparels on April 20, 2025 and sell it today you would earn a total of  7,105  from holding S P Apparels or generate 9.65% return on investment over 90 days.

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

Kingfa Science Technology  vs.  S P Apparels

Kingfa Science Technology

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak technical and fundamental indicators, Kingfa Science may actually be approaching a critical reversion point that can send shares even higher in August 2025.

S P Apparels

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in S P Apparels are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady basic indicators, S P may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Kingfa Science and S P

The main advantage of trading using opposite Kingfa Science and S P positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kingfa Science position performs unexpectedly, S P 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 S P will offset losses from the drop in S P's long position.

The idea behind Kingfa Science Technology and S P Apparels 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.

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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.