Correlation Between Yageo Corp and Holy Stone
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Holy Stone 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 Yageo Corp and Holy Stone into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Holy Stone Enterprise, you can compare the effects of market volatilities on Yageo Corp and Holy Stone 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 Yageo Corp with a short position of Holy Stone. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Holy Stone.
Diversification Opportunities for Yageo Corp and Holy Stone
0.38 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Yageo and Holy is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Holy Stone Enterprise in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Holy Stone Enterprise and Yageo Corp 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 Yageo Corp are associated (or correlated) with Holy Stone. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Holy Stone Enterprise has no effect on the direction of Yageo Corp i.e., Yageo Corp and Holy Stone go up and down completely randomly.
Pair Corralation between Yageo Corp and Holy Stone
Assuming the 90 days trading horizon Yageo Corp is expected to generate 2.03 times more return on investment than Holy Stone. However, Yageo Corp is 2.03 times more volatile than Holy Stone Enterprise. It trades about 0.02 of its potential returns per unit of risk. Holy Stone Enterprise is currently generating about 0.0 per unit of risk. If you would invest 49,100 in Yageo Corp on August 27, 2024 and sell it today you would earn a total of 4,600 from holding Yageo Corp or generate 9.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yageo Corp vs. Holy Stone Enterprise
Performance |
| Timeline |
| Yageo Corp |
| Holy Stone Enterprise |
Yageo Corp and Holy Stone Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and Holy Stone
The main advantage of trading using opposite Yageo Corp and Holy Stone positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Holy Stone 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 Holy Stone will offset losses from the drop in Holy Stone's long position.| Yageo Corp vs. Pili International Multimedia | Yageo Corp vs. AVerMedia Technologies | Yageo Corp vs. EnTie Commercial Bank | Yageo Corp vs. CHINA DEVELOPMENT FINANCIAL |
| Holy Stone vs. Novatek Microelectronics Corp | Holy Stone vs. Quanta Computer | Holy Stone vs. United Microelectronics |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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