Correlation Between Yantai Jereh and Linktel Technologies

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

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

Diversification Opportunities for Yantai Jereh and Linktel Technologies

-0.07

Correlation Coefficient

Yantai Jereh  Linktel Technologies

Good diversification

The 3 months correlation between Yantai and Linktel is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Yantai Jereh Oilfield and Linktel Technologies Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Linktel Technologies and Yantai Jereh 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 Yantai Jereh Oilfield 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 Yantai Jereh i.e., Yantai Jereh and Linktel Technologies go up and down completely randomly.

Pair Corralation between Yantai Jereh and Linktel Technologies

Assuming the 90 days trading horizon Yantai Jereh Oilfield is expected to generate 0.58 times more return on investment than Linktel Technologies. However, Yantai Jereh Oilfield is 1.74 times less risky than Linktel Technologies. It trades about 0.09 of its potential returns per unit of risk. Linktel Technologies Co is currently generating about -0.01 per unit of risk. If you would invest  3,481  in Yantai Jereh Oilfield on October 26, 2024 and sell it today you would earn a total of  394.00  from holding Yantai Jereh Oilfield or generate 11.32% return on investment over 90 days.

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

Yantai Jereh Oilfield  vs.  Linktel Technologies Co

Yantai Jereh Oilfield

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yantai Jereh Oilfield are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yantai Jereh may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Linktel Technologies

Risk-Adjusted Performance

0 of 100

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 somewhat strong basic indicators, Linktel Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Yantai Jereh and Linktel Technologies

The main advantage of trading using opposite Yantai Jereh and Linktel Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yantai Jereh 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 Yantai Jereh Oilfield 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.