Correlation Between Kingfa Science and COSMO FIRST

Can any of the company-specific risk be diversified away by investing in both Kingfa Science and COSMO FIRST 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 COSMO FIRST 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 COSMO FIRST LIMITED, you can compare the effects of market volatilities on Kingfa Science and COSMO FIRST 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 COSMO FIRST. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingfa Science and COSMO FIRST.

Diversification Opportunities for Kingfa Science and COSMO FIRST

0.52

Correlation Coefficient

Kingfa Science  COSMO FIRST

Very weak diversification

The 3 months correlation between Kingfa and COSMO is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and COSMO FIRST LIMITED in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMO FIRST LIMITED 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 COSMO FIRST. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMO FIRST LIMITED has no effect on the direction of Kingfa Science i.e., Kingfa Science and COSMO FIRST go up and down completely randomly.

Pair Corralation between Kingfa Science and COSMO FIRST

Assuming the 90 days trading horizon Kingfa Science Technology is expected to under-perform the COSMO FIRST. In addition to that, Kingfa Science is 1.09 times more volatile than COSMO FIRST LIMITED. It trades about -0.07 of its total potential returns per unit of risk. COSMO FIRST LIMITED is currently generating about 0.01 per unit of volatility. If you would invest  78,035  in COSMO FIRST LIMITED on August 30, 2024 and sell it today you would lose (320.00) from holding COSMO FIRST LIMITED or give up 0.41% of portfolio value over 90 days.

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

Kingfa Science Technology  vs.  COSMO FIRST LIMITED

Kingfa Science Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Kingfa Science Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

COSMO FIRST LIMITED

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days COSMO FIRST LIMITED has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, COSMO FIRST is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kingfa Science and COSMO FIRST

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

The idea behind Kingfa Science Technology and COSMO FIRST LIMITED 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.