Correlation Between Linktel Technologies and Shanghai Broadband

Can any of the company-specific risk be diversified away by investing in both Linktel Technologies and Shanghai Broadband 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 Shanghai Broadband 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 Shanghai Broadband Technology, you can compare the effects of market volatilities on Linktel Technologies and Shanghai Broadband 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 Shanghai Broadband. Check out your portfolio center. Please also check ongoing floating volatility patterns of Linktel Technologies and Shanghai Broadband.

Diversification Opportunities for Linktel Technologies and Shanghai Broadband

-0.21

Correlation Coefficient

Linktel Technologies  Shanghai Broadband

Very good diversification

The 3 months correlation between Linktel and Shanghai is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Linktel Technologies Co and Shanghai Broadband Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shanghai Broadband 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 Shanghai Broadband. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shanghai Broadband has no effect on the direction of Linktel Technologies i.e., Linktel Technologies and Shanghai Broadband go up and down completely randomly.

Pair Corralation between Linktel Technologies and Shanghai Broadband

Assuming the 90 days trading horizon Linktel Technologies Co is expected to generate 2.27 times more return on investment than Shanghai Broadband. However, Linktel Technologies is 2.27 times more volatile than Shanghai Broadband Technology. It trades about 0.07 of its potential returns per unit of risk. Shanghai Broadband Technology is currently generating about -0.02 per unit of risk. If you would invest  2,292  in Linktel Technologies Co on October 11, 2024 and sell it today you would earn a total of  4,861  from holding Linktel Technologies Co or generate 212.09% return on investment over 90 days.

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

Linktel Technologies Co  vs.  Shanghai Broadband Technology

Linktel Technologies

Risk-Adjusted Performance

1 of 100

Very 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.

Shanghai Broadband

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shanghai Broadband Technology are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Shanghai Broadband sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Linktel Technologies and Shanghai Broadband

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

The idea behind Linktel Technologies Co and Shanghai Broadband 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.