Correlation Between Yes Optoelectronics and Hunan Nanling
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By analyzing existing cross correlation between Yes Optoelectronics Co and Hunan Nanling Industrial, you can compare the effects of market volatilities on Yes Optoelectronics and Hunan Nanling 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 Yes Optoelectronics with a short position of Hunan Nanling. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Optoelectronics and Hunan Nanling.
Diversification Opportunities for Yes Optoelectronics and Hunan Nanling
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yes and Hunan is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Yes Optoelectronics Co and Hunan Nanling Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hunan Nanling Industrial and Yes Optoelectronics 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 Yes Optoelectronics Co are associated (or correlated) with Hunan Nanling. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hunan Nanling Industrial has no effect on the direction of Yes Optoelectronics i.e., Yes Optoelectronics and Hunan Nanling go up and down completely randomly.
Pair Corralation between Yes Optoelectronics and Hunan Nanling
Assuming the 90 days trading horizon Yes Optoelectronics Co is expected to under-perform the Hunan Nanling. In addition to that, Yes Optoelectronics is 2.17 times more volatile than Hunan Nanling Industrial. It trades about -0.31 of its total potential returns per unit of risk. Hunan Nanling Industrial is currently generating about -0.35 per unit of volatility. If you would invest 1,132 in Hunan Nanling Industrial on November 7, 2024 and sell it today you would lose (102.00) from holding Hunan Nanling Industrial or give up 9.01% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Yes Optoelectronics Co vs. Hunan Nanling Industrial
Performance |
Timeline |
Yes Optoelectronics |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Hunan Nanling Industrial |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yes Optoelectronics and Hunan Nanling Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yes Optoelectronics and Hunan Nanling
The main advantage of trading using opposite Yes Optoelectronics and Hunan Nanling positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yes Optoelectronics position performs unexpectedly, Hunan Nanling 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 Hunan Nanling will offset losses from the drop in Hunan Nanling's long position.The idea behind Yes Optoelectronics Co and Hunan Nanling Industrial 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.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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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