Correlation Between Focus Media and YiDong Electronics
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By analyzing existing cross correlation between Focus Media Information and YiDong Electronics Technology, you can compare the effects of market volatilities on Focus Media and YiDong Electronics 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 Focus Media with a short position of YiDong Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Focus Media and YiDong Electronics.
Diversification Opportunities for Focus Media and YiDong Electronics
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Focus and YiDong is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Focus Media Information and YiDong Electronics Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YiDong Electronics and Focus Media 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 Focus Media Information are associated (or correlated) with YiDong Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YiDong Electronics has no effect on the direction of Focus Media i.e., Focus Media and YiDong Electronics go up and down completely randomly.
Pair Corralation between Focus Media and YiDong Electronics
Assuming the 90 days trading horizon Focus Media Information is expected to under-perform the YiDong Electronics. But the stock apears to be less risky and, when comparing its historical volatility, Focus Media Information is 1.92 times less risky than YiDong Electronics. The stock trades about -0.16 of its potential returns per unit of risk. The YiDong Electronics Technology is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,071 in YiDong Electronics Technology on September 14, 2024 and sell it today you would earn a total of 32.00 from holding YiDong Electronics Technology or generate 1.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Focus Media Information vs. YiDong Electronics Technology
Performance |
| Timeline |
| Focus Media Information |
| YiDong Electronics |
Focus Media and YiDong Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Focus Media and YiDong Electronics
The main advantage of trading using opposite Focus Media and YiDong Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Focus Media position performs unexpectedly, YiDong Electronics 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 YiDong Electronics will offset losses from the drop in YiDong Electronics' long position.| Focus Media vs. Industrial and Commercial | Focus Media vs. China Construction Bank | Focus Media vs. Bank of China | Focus Media vs. Agricultural Bank of |
| YiDong Electronics vs. Focus Media Information | YiDong Electronics vs. State Grid InformationCommunication | YiDong Electronics vs. Datang HuaYin Electric | YiDong Electronics vs. Jilin Jlu Communication |
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 the Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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