Correlation Between Linktel Technologies and Xinhua Winshare

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

Diversification Opportunities for Linktel Technologies and Xinhua Winshare

0.23

Correlation Coefficient

Linktel Technologies  Xinhua Winshare

Modest diversification

The 3 months correlation between Linktel and Xinhua is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Linktel Technologies Co and Xinhua Winshare Publishing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xinhua Winshare Publ 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 Xinhua Winshare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xinhua Winshare Publ has no effect on the direction of Linktel Technologies i.e., Linktel Technologies and Xinhua Winshare go up and down completely randomly.

Pair Corralation between Linktel Technologies and Xinhua Winshare

Assuming the 90 days trading horizon Linktel Technologies Co is expected to generate 2.97 times more return on investment than Xinhua Winshare. However, Linktel Technologies is 2.97 times more volatile than Xinhua Winshare Publishing. It trades about -0.01 of its potential returns per unit of risk. Xinhua Winshare Publishing is currently generating about -0.11 per unit of risk. If you would invest  7,691  in Linktel Technologies Co on December 25, 2024 and sell it today you would lose (650.00) from holding Linktel Technologies Co or give up 8.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.28%
Values	Daily Returns

Linktel Technologies Co  vs.  Xinhua Winshare Publishing

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 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.

Xinhua Winshare Publ

Risk-Adjusted Performance

Very Weak

Over the last 90 days Xinhua Winshare Publishing 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 Linktel Technologies and Xinhua Winshare

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

The idea behind Linktel Technologies Co and Xinhua Winshare Publishing 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..