Correlation Between Yuan Jen and Space Shuttle
Can any of the company-specific risk be diversified away by investing in both Yuan Jen and Space Shuttle 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 Yuan Jen and Space Shuttle into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuan Jen Enterprises and Space Shuttle Hi Tech, you can compare the effects of market volatilities on Yuan Jen and Space Shuttle 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 Yuan Jen with a short position of Space Shuttle. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuan Jen and Space Shuttle.
Diversification Opportunities for Yuan Jen and Space Shuttle
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yuan and Space is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuan Jen Enterprises and Space Shuttle Hi Tech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Space Shuttle Hi and Yuan Jen 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 Yuan Jen Enterprises are associated (or correlated) with Space Shuttle. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Space Shuttle Hi has no effect on the direction of Yuan Jen i.e., Yuan Jen and Space Shuttle go up and down completely randomly.
Pair Corralation between Yuan Jen and Space Shuttle
Assuming the 90 days trading horizon Yuan Jen Enterprises is expected to generate 1.13 times more return on investment than Space Shuttle. However, Yuan Jen is 1.13 times more volatile than Space Shuttle Hi Tech. It trades about 0.05 of its potential returns per unit of risk. Space Shuttle Hi Tech is currently generating about 0.01 per unit of risk. If you would invest 2,015 in Yuan Jen Enterprises on November 2, 2024 and sell it today you would earn a total of 1,255 from holding Yuan Jen Enterprises or generate 62.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 99.79% |
| Values | Daily Returns |
Yuan Jen Enterprises vs. Space Shuttle Hi Tech
Performance |
| Timeline |
| Yuan Jen Enterprises |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Space Shuttle Hi |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Yuan Jen and Space Shuttle Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuan Jen and Space Shuttle
The main advantage of trading using opposite Yuan Jen and Space Shuttle positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuan Jen position performs unexpectedly, Space Shuttle 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 Space Shuttle will offset losses from the drop in Space Shuttle's long position.The idea behind Yuan Jen Enterprises and Space Shuttle Hi Tech 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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