Correlation Between DingZing Advanced and Intai Technology

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

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

Diversification Opportunities for DingZing Advanced and Intai Technology

0.09

Correlation Coefficient

DingZing Advanced  Intai Technology

Significant diversification

The 3 months correlation between DingZing and Intai is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding DingZing Advanced Materials and Intai Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intai Technology and DingZing Advanced 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 DingZing Advanced Materials are associated (or correlated) with Intai Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intai Technology has no effect on the direction of DingZing Advanced i.e., DingZing Advanced and Intai Technology go up and down completely randomly.

Pair Corralation between DingZing Advanced and Intai Technology

Assuming the 90 days trading horizon DingZing Advanced Materials is expected to generate 1.95 times more return on investment than Intai Technology. However, DingZing Advanced is 1.95 times more volatile than Intai Technology. It trades about 0.09 of its potential returns per unit of risk. Intai Technology is currently generating about 0.01 per unit of risk. If you would invest  5,342  in DingZing Advanced Materials on October 24, 2024 and sell it today you would earn a total of  10,258  from holding DingZing Advanced Materials or generate 192.03% return on investment over 90 days.

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

DingZing Advanced Materials  vs.  Intai Technology

DingZing Advanced

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in DingZing Advanced Materials are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, DingZing Advanced may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Intai Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Intai Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Intai Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with DingZing Advanced and Intai Technology

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

The idea behind DingZing Advanced Materials and Intai 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.