Correlation Between Yunnan Yuntou and SUNSEA Telecommunicatio
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By analyzing existing cross correlation between Yunnan Yuntou Ecology and SUNSEA Telecommunications Co, you can compare the effects of market volatilities on Yunnan Yuntou and SUNSEA Telecommunicatio 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 Yunnan Yuntou with a short position of SUNSEA Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yunnan Yuntou and SUNSEA Telecommunicatio.
Diversification Opportunities for Yunnan Yuntou and SUNSEA Telecommunicatio
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Yunnan and SUNSEA is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Yunnan Yuntou Ecology and SUNSEA Telecommunications Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SUNSEA Telecommunicatio and Yunnan Yuntou 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 Yunnan Yuntou Ecology are associated (or correlated) with SUNSEA Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SUNSEA Telecommunicatio has no effect on the direction of Yunnan Yuntou i.e., Yunnan Yuntou and SUNSEA Telecommunicatio go up and down completely randomly.
Pair Corralation between Yunnan Yuntou and SUNSEA Telecommunicatio
Assuming the 90 days trading horizon Yunnan Yuntou is expected to generate 2.38 times less return on investment than SUNSEA Telecommunicatio. But when comparing it to its historical volatility, Yunnan Yuntou Ecology is 1.72 times less risky than SUNSEA Telecommunicatio. It trades about 0.02 of its potential returns per unit of risk. SUNSEA Telecommunications Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 769.00 in SUNSEA Telecommunications Co on August 25, 2024 and sell it today you would earn a total of 46.00 from holding SUNSEA Telecommunications Co or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yunnan Yuntou Ecology vs. SUNSEA Telecommunications Co
Performance |
| Timeline |
| Yunnan Yuntou Ecology |
| SUNSEA Telecommunicatio |
Yunnan Yuntou and SUNSEA Telecommunicatio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yunnan Yuntou and SUNSEA Telecommunicatio
The main advantage of trading using opposite Yunnan Yuntou and SUNSEA Telecommunicatio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yunnan Yuntou position performs unexpectedly, SUNSEA Telecommunicatio 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 SUNSEA Telecommunicatio will offset losses from the drop in SUNSEA Telecommunicatio's long position.| Yunnan Yuntou vs. Fiberhome Telecommunication Technologies | Yunnan Yuntou vs. Wuhan Yangtze Communication | Yunnan Yuntou vs. Shenzhen Clou Electronics | Yunnan Yuntou vs. Hangzhou Weiguang Electronic |
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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