Correlation Between LINGYI ITECH and Advance Auto

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both LINGYI ITECH and Advance Auto 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 LINGYI ITECH and Advance Auto into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LINGYI ITECH GUAN and Advance Auto Parts, you can compare the effects of market volatilities on LINGYI ITECH and Advance Auto 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 LINGYI ITECH with a short position of Advance Auto. Check out your portfolio center. Please also check ongoing floating volatility patterns of LINGYI ITECH and Advance Auto.

Diversification Opportunities for LINGYI ITECH and Advance Auto

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between LINGYI and Advance is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding LINGYI ITECH GUAN and Advance Auto Parts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Advance Auto Parts and LINGYI ITECH 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 LINGYI ITECH GUAN are associated (or correlated) with Advance Auto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Advance Auto Parts has no effect on the direction of LINGYI ITECH i.e., LINGYI ITECH and Advance Auto go up and down completely randomly.

Pair Corralation between LINGYI ITECH and Advance Auto

Assuming the 90 days trading horizon LINGYI ITECH GUAN is expected to generate 1.09 times more return on investment than Advance Auto. However, LINGYI ITECH is 1.09 times more volatile than Advance Auto Parts. It trades about 0.27 of its potential returns per unit of risk. Advance Auto Parts is currently generating about -0.15 per unit of risk. If you would invest  469.00  in LINGYI ITECH GUAN on April 1, 2022 and sell it today you would earn a total of  42.00  from holding LINGYI ITECH GUAN or generate 8.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy76.19%
ValuesDaily Returns

LINGYI ITECH GUAN  vs.  Advance Auto Parts

 Performance (%) 
      Timeline 
LINGYI ITECH GUAN 
LINGYI Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in LINGYI ITECH GUAN are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, LINGYI ITECH is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

LINGYI Price Channel

Advance Auto Parts 
Advance Performance
0 of 100
Over the last 90 days Advance Auto Parts has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in July 2022. The recent disarray may also be a sign of long period up-swing for the firm insiders.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0327
Payout Ratio
0.41
Last Split Factor
3:2
Forward Annual Dividend Rate
6.0
Dividend Date
2022-07-01
Ex Dividend Date
2022-06-16
Last Split Date
2005-09-26

Advance Price Channel

LINGYI ITECH and Advance Auto Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with LINGYI ITECH and Advance Auto

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

LINGYI ITECH GUAN

Pair trading matchups for LINGYI ITECH

Pacific Gas vs. LINGYI ITECH
Cia DE vs. LINGYI ITECH
Visa vs. LINGYI ITECH
GM vs. LINGYI ITECH
Citigroup vs. LINGYI ITECH
Vmware vs. LINGYI ITECH
Sentinelone Inc vs. LINGYI ITECH
Ford vs. LINGYI ITECH
Alphabet vs. LINGYI ITECH
Brenmiller Energy vs. LINGYI ITECH
Cleveland Cliffs vs. LINGYI ITECH
Salesforce vs. LINGYI ITECH
The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against LINGYI ITECH as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. LINGYI ITECH's systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, LINGYI ITECH's unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to LINGYI ITECH GUAN.
The idea behind LINGYI ITECH GUAN and Advance Auto Parts 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.
Check out your portfolio center. 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.

Other Complementary Tools

Money Managers
Screen money managers from public funds and ETFs managed around the world
Go
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges
Go
Idea Analyzer
Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Bollinger Bands
Use Bollinger Bands indicator to analyze target price for a given investing horizon
Go
Portfolio Center
All portfolio management and optimization tools to improve performance of your portfolios
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Alpha Finder
Use alpha and beta coefficients to find investment opportunities after accounting for the risk
Go