Correlation Between LINGYI ITECH and SSC Technologies

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

Diversification Opportunities for LINGYI ITECH and SSC Technologies

0.74
  Correlation Coefficient

Poor diversification

The 3 months correlation between LINGYI and SSC Technologies is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding LINGYI ITECH GUAN and SSC Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SSC Technologies 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 SSC Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SSC Technologies has no effect on the direction of LINGYI ITECH i.e., LINGYI ITECH and SSC Technologies go up and down completely randomly.

Pair Corralation between LINGYI ITECH and SSC Technologies

Assuming the 90 days trading horizon LINGYI ITECH GUAN is expected to generate 0.95 times more return on investment than SSC Technologies. However, LINGYI ITECH GUAN is 1.05 times less risky than SSC Technologies. It trades about 0.19 of its potential returns per unit of risk. SSC Technologies is currently generating about -0.18 per unit of risk. If you would invest  467.00  in LINGYI ITECH GUAN on April 6, 2022 and sell it today you would earn a total of  31.00  from holding LINGYI ITECH GUAN or generate 6.64% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy85.0%
ValuesDaily Returns

LINGYI ITECH GUAN  vs.  SSC Technologies

 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

SSC Technologies 
SSC Technologies Performance
0 of 100
Over the last 90 days SSC Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in August 2022. The current disturbance may also be a sign of long term up-swing for the company investors.

Structure and Payout Changes

Forward Annual Dividend Yield
0.0136
Payout Ratio
0.15
Last Split Factor
2:1
Forward Annual Dividend Rate
0.8
Dividend Date
2022-06-15
Ex Dividend Date
2022-05-31
Last Split Date
2016-06-27

SSC Technologies Price Channel

LINGYI ITECH and SSC Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with LINGYI ITECH and SSC Technologies

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

LINGYI ITECH GUAN

Pair trading matchups for LINGYI ITECH

Walker Dunlop vs. LINGYI ITECH
Salesforce vs. LINGYI ITECH
Sentinelone Inc vs. LINGYI ITECH
Ford vs. LINGYI ITECH
International Business vs. LINGYI ITECH
GM vs. LINGYI ITECH
Chevron Corp vs. LINGYI ITECH
Occidental Petroleum vs. LINGYI ITECH
US Oil vs. LINGYI ITECH
Ipath Series vs. LINGYI ITECH
Citigroup 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 SSC Technologies 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.

SSC Technologies

Pair trading matchups for SSC Technologies

Tesla vs. SSC Technologies
US Brent vs. SSC Technologies
Chevron Corp vs. SSC Technologies
GM vs. SSC Technologies
Ipath Series vs. SSC Technologies
Ford vs. SSC Technologies
US Oil vs. SSC Technologies
International Business vs. SSC Technologies
Occidental Petroleum vs. SSC Technologies
Sentinelone Inc vs. SSC Technologies
Exxon vs. SSC Technologies
Citigroup vs. SSC Technologies
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 SSC Technologies 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. SSC Technologies' 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, SSC Technologies' 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 SSC Technologies.
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.

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