Correlation Between Ipath Series and LINGYI ITECH

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

Diversification Opportunities for Ipath Series and LINGYI ITECH

-0.2
  Correlation Coefficient

Good diversification

The 3 months correlation between Ipath and LINGYI is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Ipath Series B 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 Ipath Series 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 Ipath Series B 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 Ipath Series i.e., Ipath Series and LINGYI ITECH go up and down completely randomly.

Pair Corralation between Ipath Series and LINGYI ITECH

Considering the 90-day investment horizon Ipath Series is expected to generate 2.73 times less return on investment than LINGYI ITECH. In addition to that, Ipath Series is 1.22 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 0.21 per unit of volatility. If you would invest  486.00  in LINGYI ITECH GUAN on May 12, 2022 and sell it today you would earn a total of  34.00  from holding LINGYI ITECH GUAN or generate 7.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy86.36%
ValuesDaily Returns

Ipath Series B  vs.  LINGYI ITECH GUAN

 Performance (%) 
       Timeline  
Ipath Series B 
Ipath Performance
0 of 100
Over the last 90 days Ipath Series B has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Ipath Series is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Ipath Price Channel

LINGYI ITECH GUAN 
LINGYI Performance
10 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in LINGYI ITECH GUAN are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, LINGYI ITECH sustained solid returns over the last few months and may actually be approaching a breakup point.

LINGYI Price Channel

Ipath Series and LINGYI ITECH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ipath Series and LINGYI ITECH

The main advantage of trading using opposite Ipath Series and LINGYI ITECH positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ipath Series 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.

Ipath Series B

Pair trading matchups for Ipath Series

Visa vs. Ipath Series
GM vs. Ipath Series
Alphabet vs. Ipath Series
Nasdaq QQQ vs. Ipath Series
Bitcoin Invt vs. Ipath Series
Salesforce vs. Ipath Series
SP 500 vs. Ipath Series
B of A vs. Ipath Series
Walker Dunlop vs. Ipath Series
Bitcoin vs. Ipath Series
Vmware vs. Ipath Series
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 Ipath Series 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. Ipath Series' 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, Ipath Series' 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 Ipath Series B.
The idea behind Ipath Series B 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.

LINGYI ITECH GUAN

Pair trading matchups for LINGYI ITECH

Dupont Denemours vs. LINGYI ITECH
Salesforce vs. LINGYI ITECH
Twitter vs. LINGYI ITECH
Vmware vs. LINGYI ITECH
GM vs. LINGYI ITECH
Alphabet vs. LINGYI ITECH
Walker Dunlop vs. LINGYI ITECH
Bitcoin vs. LINGYI ITECH
Bitcoin Invt vs. LINGYI ITECH
SP 500 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.
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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