Correlation Between Sunwave Communications and Yangmei Chemical
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By analyzing existing cross correlation between Sunwave Communications Co and Yangmei Chemical Co, you can compare the effects of market volatilities on Sunwave Communications and Yangmei Chemical 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 Sunwave Communications with a short position of Yangmei Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunwave Communications and Yangmei Chemical.
Diversification Opportunities for Sunwave Communications and Yangmei Chemical
0.88 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sunwave and Yangmei is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Sunwave Communications Co and Yangmei Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yangmei Chemical and Sunwave Communications 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 Sunwave Communications Co are associated (or correlated) with Yangmei Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yangmei Chemical has no effect on the direction of Sunwave Communications i.e., Sunwave Communications and Yangmei Chemical go up and down completely randomly.
Pair Corralation between Sunwave Communications and Yangmei Chemical
Assuming the 90 days trading horizon Sunwave Communications Co is expected to generate 1.66 times more return on investment than Yangmei Chemical. However, Sunwave Communications is 1.66 times more volatile than Yangmei Chemical Co. It trades about 0.29 of its potential returns per unit of risk. Yangmei Chemical Co is currently generating about 0.12 per unit of risk. If you would invest 519.00 in Sunwave Communications Co on September 5, 2024 and sell it today you would earn a total of 164.00 from holding Sunwave Communications Co or generate 31.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunwave Communications Co vs. Yangmei Chemical Co
Performance |
| Timeline |
| Sunwave Communications |
| Yangmei Chemical |
Sunwave Communications and Yangmei Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunwave Communications and Yangmei Chemical
The main advantage of trading using opposite Sunwave Communications and Yangmei Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunwave Communications position performs unexpectedly, Yangmei Chemical 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 Yangmei Chemical will offset losses from the drop in Yangmei Chemical's long position.| Sunwave Communications vs. Industrial and Commercial | Sunwave Communications vs. China Construction Bank | Sunwave Communications vs. Bank of China | Sunwave Communications vs. Agricultural Bank of |
| Yangmei Chemical vs. Sichuan Jinshi Technology | Yangmei Chemical vs. FSPG Hi Tech Co | Yangmei Chemical vs. Wuhan Yangtze Communication | Yangmei Chemical vs. Fujian Newland Computer |
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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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