Correlation Between Shenzhen Kaifa and Linktel Technologies

Can any of the company-specific risk be diversified away by investing in both Shenzhen Kaifa and Linktel Technologies 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 Shenzhen Kaifa and Linktel Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Shenzhen Kaifa Technology and Linktel Technologies Co, you can compare the effects of market volatilities on Shenzhen Kaifa and Linktel Technologies 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 Shenzhen Kaifa with a short position of Linktel Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Shenzhen Kaifa and Linktel Technologies.

Diversification Opportunities for Shenzhen Kaifa and Linktel Technologies

0.66

Correlation Coefficient

Shenzhen Kaifa  Linktel Technologies

Poor diversification

The 3 months correlation between Shenzhen and Linktel is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Shenzhen Kaifa Technology and Linktel Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linktel Technologies and Shenzhen Kaifa 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 Shenzhen Kaifa Technology are associated (or correlated) with Linktel Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Linktel Technologies has no effect on the direction of Shenzhen Kaifa i.e., Shenzhen Kaifa and Linktel Technologies go up and down completely randomly.

Pair Corralation between Shenzhen Kaifa and Linktel Technologies

Assuming the 90 days trading horizon Shenzhen Kaifa Technology is expected to generate 0.63 times more return on investment than Linktel Technologies. However, Shenzhen Kaifa Technology is 1.59 times less risky than Linktel Technologies. It trades about -0.03 of its potential returns per unit of risk. Linktel Technologies Co is currently generating about -0.04 per unit of risk. If you would invest  2,052  in Shenzhen Kaifa Technology on December 26, 2024 and sell it today you would lose (125.00) from holding Shenzhen Kaifa Technology or give up 6.09% of portfolio value over 90 days.

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

Shenzhen Kaifa Technology  vs.  Linktel Technologies Co

Shenzhen Kaifa Technology

Risk-Adjusted Performance

Very Weak

Over the last 90 days Shenzhen Kaifa Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Shenzhen Kaifa is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Linktel Technologies

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Shenzhen Kaifa and Linktel Technologies

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

The idea behind Shenzhen Kaifa Technology and Linktel Technologies Co 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.