Correlation Between Ark Innovation and LINGYI ITECH

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

Diversification Opportunities for Ark Innovation and LINGYI ITECH

0.1
  Correlation Coefficient

Average diversification

The 3 months correlation between Ark Innovation and LINGYI is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Ark Innovation ETF and LINGYI ITECH GUAN in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LINGYI ITECH GUAN and Ark Innovation 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 Ark Innovation ETF are associated (or correlated) with LINGYI ITECH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LINGYI ITECH GUAN has no effect on the direction of Ark Innovation i.e., Ark Innovation and LINGYI ITECH go up and down completely randomly.

Pair Corralation between Ark Innovation and LINGYI ITECH

Given the investment horizon of 90 days Ark Innovation ETF is expected to under-perform the LINGYI ITECH. In addition to that, Ark Innovation is 1.36 times more volatile than LINGYI ITECH GUAN. It trades about -0.06 of its total potential returns per unit of risk. LINGYI ITECH GUAN is currently generating about -0.06 per unit of volatility. If you would invest  495.00  in LINGYI ITECH GUAN on July 2, 2022 and sell it today you would lose (50.00)  from holding LINGYI ITECH GUAN or give up 10.1% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy87.3%
ValuesDaily Returns

Ark Innovation ETF  vs.  LINGYI ITECH GUAN

 Performance (%) 
       Timeline  
Ark Innovation ETF 
Ark Innovation Performance
0 of 100
Over the last 90 days Ark Innovation ETF has generated negative risk-adjusted returns adding no value to investors with long positions. Despite abnormal performance in the last few months, the Etf's forward-looking signals remain fairly strong which may send shares a bit higher in October 2022. The recent confusion may also be a sign of long-lasting up-swing for the Etf traders.

Ark Innovation Price Channel

LINGYI ITECH GUAN 
LINGYI Performance
0 of 100
Over the last 90 days LINGYI ITECH GUAN 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.

LINGYI Price Channel

Ark Innovation and LINGYI ITECH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ark Innovation and LINGYI ITECH

The main advantage of trading using opposite Ark Innovation and LINGYI ITECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ark Innovation position performs unexpectedly, LINGYI ITECH 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 LINGYI ITECH will offset losses from the drop in LINGYI ITECH's long position.
Ark Innovation vs. The Travelers Companies
The idea behind Ark Innovation ETF and LINGYI ITECH GUAN 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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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.

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