Correlation Between Linktel Technologies and Shenzhen Kaifa

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

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

Diversification Opportunities for Linktel Technologies and Shenzhen Kaifa

0.54

Correlation Coefficient

Linktel Technologies  Shenzhen Kaifa

Very weak diversification

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

Pair Corralation between Linktel Technologies and Shenzhen Kaifa

Assuming the 90 days trading horizon Linktel Technologies is expected to generate 1.65 times less return on investment than Shenzhen Kaifa. In addition to that, Linktel Technologies is 1.05 times more volatile than Shenzhen Kaifa Technology. It trades about 0.02 of its total potential returns per unit of risk. Shenzhen Kaifa Technology is currently generating about 0.04 per unit of volatility. If you would invest  1,899  in Shenzhen Kaifa Technology on October 25, 2024 and sell it today you would earn a total of  87.00  from holding Shenzhen Kaifa Technology or generate 4.58% return on investment over 90 days.

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

Linktel Technologies Co  vs.  Shenzhen Kaifa Technology

Linktel Technologies

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Linktel Technologies Co are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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.

Shenzhen Kaifa Technology

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Shenzhen Kaifa Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shenzhen Kaifa may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Linktel Technologies and Shenzhen Kaifa

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

The idea behind Linktel Technologies Co and Shenzhen Kaifa 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.