Correlation Between Kingfa Science and Xchanging Solutions

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

Diversification Opportunities for Kingfa Science and Xchanging Solutions

0.24

Correlation Coefficient

Kingfa Science  Xchanging Solutions

Modest diversification

The 3 months correlation between Kingfa and Xchanging is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Kingfa Science Technology and Xchanging Solutions Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xchanging Solutions 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 Xchanging Solutions. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xchanging Solutions has no effect on the direction of Kingfa Science i.e., Kingfa Science and Xchanging Solutions go up and down completely randomly.

Pair Corralation between Kingfa Science and Xchanging Solutions

Assuming the 90 days trading horizon Kingfa Science Technology is expected to generate 1.48 times more return on investment than Xchanging Solutions. However, Kingfa Science is 1.48 times more volatile than Xchanging Solutions Limited. It trades about 0.08 of its potential returns per unit of risk. Xchanging Solutions Limited is currently generating about 0.06 per unit of risk. If you would invest  299,580  in Kingfa Science Technology on May 7, 2025 and sell it today you would earn a total of  35,310  from holding Kingfa Science Technology or generate 11.79% 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.  Xchanging Solutions Limited

Kingfa Science Technology

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Kingfa Science Technology are ranked lower than 6 (%) 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.

Xchanging Solutions

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Xchanging Solutions Limited are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly strong forward indicators, Xchanging Solutions is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Kingfa Science and Xchanging Solutions

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

The idea behind Kingfa Science Technology and Xchanging Solutions 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.