Correlation Between Yulon Nissan and Chaintech Technology
Can any of the company-specific risk be diversified away by investing in both Yulon Nissan and Chaintech Technology 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 Yulon Nissan and Chaintech Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Nissan Motor and Chaintech Technology Corp, you can compare the effects of market volatilities on Yulon Nissan and Chaintech Technology 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 Yulon Nissan with a short position of Chaintech Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Nissan and Chaintech Technology.
Diversification Opportunities for Yulon Nissan and Chaintech Technology
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and Chaintech is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Nissan Motor and Chaintech Technology Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chaintech Technology Corp and Yulon Nissan 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 Yulon Nissan Motor are associated (or correlated) with Chaintech Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chaintech Technology Corp has no effect on the direction of Yulon Nissan i.e., Yulon Nissan and Chaintech Technology go up and down completely randomly.
Pair Corralation between Yulon Nissan and Chaintech Technology
Assuming the 90 days trading horizon Yulon Nissan Motor is expected to under-perform the Chaintech Technology. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Nissan Motor is 1.86 times less risky than Chaintech Technology. The stock trades about -0.1 of its potential returns per unit of risk. The Chaintech Technology Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 2,760 in Chaintech Technology Corp on September 2, 2024 and sell it today you would earn a total of 1,030 from holding Chaintech Technology Corp or generate 37.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Nissan Motor vs. Chaintech Technology Corp
Performance |
| Timeline |
| Yulon Nissan Motor |
| Chaintech Technology Corp |
Yulon Nissan and Chaintech Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Nissan and Chaintech Technology
The main advantage of trading using opposite Yulon Nissan and Chaintech Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Nissan position performs unexpectedly, Chaintech Technology 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 Chaintech Technology will offset losses from the drop in Chaintech Technology's long position.| Yulon Nissan vs. Chaintech Technology Corp | Yulon Nissan vs. Avision | Yulon Nissan vs. Clevo Co | Yulon Nissan vs. Elitegroup Computer Systems |
| Chaintech Technology vs. Biostar Microtech International | Chaintech Technology vs. Elitegroup Computer Systems | Chaintech Technology vs. Shuttle | Chaintech Technology vs. Gigabyte Technology Co |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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