Correlation Between US Oil and LINGYI ITECH

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

Diversification Opportunities for US Oil and LINGYI ITECH

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between US Oil and LINGYI is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding US Oil Fund 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 US Oil 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 US Oil Fund 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 US Oil i.e., US Oil and LINGYI ITECH go up and down completely randomly.

Pair Corralation between US Oil and LINGYI ITECH

If you would invest (100.00)  in LINGYI ITECH GUAN on May 15, 2022 and sell it today you would earn a total of  100.00  from holding LINGYI ITECH GUAN or generate -100.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

US Oil Fund  vs.  LINGYI ITECH GUAN

 Performance (%) 
       Timeline  
US Oil Fund 
US Oil Performance
0 of 100
Over the last 90 days US Oil Fund has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Etf's basic indicators remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

US Oil 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 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.

US Oil and LINGYI ITECH Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with US Oil and LINGYI ITECH

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

US Oil Fund

Pair trading matchups for US Oil

The idea behind US Oil Fund 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

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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.

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