Correlation Between Hubei Yingtong and InterDigital

Can any of the company-specific risk be diversified away by investing in both Hubei Yingtong and InterDigital 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 Hubei Yingtong and InterDigital into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Hubei Yingtong Telecommunication and InterDigital, you can compare the effects of market volatilities on Hubei Yingtong and InterDigital 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 Hubei Yingtong with a short position of InterDigital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hubei Yingtong and InterDigital.

Diversification Opportunities for Hubei Yingtong and InterDigital

0.89

Correlation Coefficient

Hubei Yingtong  InterDigital

Very poor diversification

The 3 months correlation between Hubei and InterDigital is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Hubei Yingtong Telecommunicati and InterDigital in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterDigital and Hubei Yingtong 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 Hubei Yingtong Telecommunication are associated (or correlated) with InterDigital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterDigital has no effect on the direction of Hubei Yingtong i.e., Hubei Yingtong and InterDigital go up and down completely randomly.

Pair Corralation between Hubei Yingtong and InterDigital

Assuming the 90 days trading horizon Hubei Yingtong is expected to generate 2.27 times less return on investment than InterDigital. But when comparing it to its historical volatility, Hubei Yingtong Telecommunication is 1.26 times less risky than InterDigital. It trades about 0.17 of its potential returns per unit of risk. InterDigital is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  22,474  in InterDigital on July 18, 2025 and sell it today you would earn a total of  13,995  from holding InterDigital or generate 62.27% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	92.19%
Values	Daily Returns

Hubei Yingtong Telecommunicati  vs.  InterDigital

Hubei Yingtong Telec

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hubei Yingtong Telecommunication are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Hubei Yingtong sustained solid returns over the last few months and may actually be approaching a breakup point.

InterDigital

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in InterDigital are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, InterDigital exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Hubei Yingtong and InterDigital

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

The idea behind Hubei Yingtong Telecommunication and InterDigital 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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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 the Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.