Correlation Between Kingboard Chemical and Honeywell International

Can any of the company-specific risk be diversified away by investing in both Kingboard Chemical and Honeywell International 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 Kingboard Chemical and Honeywell International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Kingboard Chemical Holdings and Honeywell International, you can compare the effects of market volatilities on Kingboard Chemical and Honeywell International 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 Kingboard Chemical with a short position of Honeywell International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Kingboard Chemical and Honeywell International.

Diversification Opportunities for Kingboard Chemical and Honeywell International

0.54

Correlation Coefficient

Kingboard Chemical  Honeywell International

Very weak diversification

The 3 months correlation between Kingboard and Honeywell is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding Kingboard Chemical Holdings and Honeywell International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Honeywell International and Kingboard Chemical 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 Kingboard Chemical Holdings are associated (or correlated) with Honeywell International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Honeywell International has no effect on the direction of Kingboard Chemical i.e., Kingboard Chemical and Honeywell International go up and down completely randomly.

Pair Corralation between Kingboard Chemical and Honeywell International

Assuming the 90 days horizon Kingboard Chemical Holdings is expected to generate 2.74 times more return on investment than Honeywell International. However, Kingboard Chemical is 2.74 times more volatile than Honeywell International. It trades about 0.09 of its potential returns per unit of risk. Honeywell International is currently generating about 0.07 per unit of risk. If you would invest  1,273  in Kingboard Chemical Holdings on May 6, 2025 and sell it today you would earn a total of  232.00  from holding Kingboard Chemical Holdings or generate 18.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	96.88%
Values	Daily Returns

Kingboard Chemical Holdings  vs.  Honeywell International

Kingboard Chemical

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Kingboard Chemical Holdings are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal fundamental indicators, Kingboard Chemical showed solid returns over the last few months and may actually be approaching a breakup point.

Honeywell International

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Honeywell International are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Honeywell International is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Kingboard Chemical and Honeywell International

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

The idea behind Kingboard Chemical Holdings and Honeywell International 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 Stocks Directory module to find actively traded stocks across global markets.