Correlation Between Imeik Technology and Contemporary Amperex

Can any of the company-specific risk be diversified away by investing in both Imeik Technology and Contemporary Amperex 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 Imeik Technology and Contemporary Amperex into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Imeik Technology Development and Contemporary Amperex Technology, you can compare the effects of market volatilities on Imeik Technology and Contemporary Amperex 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 Imeik Technology with a short position of Contemporary Amperex. Check out your portfolio center. Please also check ongoing floating volatility patterns of Imeik Technology and Contemporary Amperex.

Diversification Opportunities for Imeik Technology and Contemporary Amperex

0.92

Correlation Coefficient

Imeik Technology  Contemporary Amperex

Almost no diversification

The 3 months correlation between Imeik and Contemporary is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Imeik Technology Development and Contemporary Amperex Technolog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Contemporary Amperex and Imeik Technology 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 Imeik Technology Development are associated (or correlated) with Contemporary Amperex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Contemporary Amperex has no effect on the direction of Imeik Technology i.e., Imeik Technology and Contemporary Amperex go up and down completely randomly.

Pair Corralation between Imeik Technology and Contemporary Amperex

Assuming the 90 days trading horizon Imeik Technology Development is expected to under-perform the Contemporary Amperex. In addition to that, Imeik Technology is 1.2 times more volatile than Contemporary Amperex Technology. It trades about -0.08 of its total potential returns per unit of risk. Contemporary Amperex Technology is currently generating about -0.03 per unit of volatility. If you would invest  26,755  in Contemporary Amperex Technology on September 21, 2024 and sell it today you would lose (484.00) from holding Contemporary Amperex Technology or give up 1.81% of portfolio value over 90 days.

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

Imeik Technology Development  vs.  Contemporary Amperex Technolog

Imeik Technology Dev

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Imeik Technology Development are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Imeik Technology sustained solid returns over the last few months and may actually be approaching a breakup point.

Contemporary Amperex

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Contemporary Amperex Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Contemporary Amperex sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Imeik Technology and Contemporary Amperex

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

The idea behind Imeik Technology Development and Contemporary Amperex Technology 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.