Correlation Between Yageo Corp and Senao Networks
Can any of the company-specific risk be diversified away by investing in both Yageo Corp and Senao Networks 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 Senao Networks into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yageo Corp and Senao Networks, you can compare the effects of market volatilities on Yageo Corp and Senao Networks 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 Senao Networks. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yageo Corp and Senao Networks.
Diversification Opportunities for Yageo Corp and Senao Networks
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yageo and Senao is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Yageo Corp and Senao Networks in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senao Networks 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 Senao Networks. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senao Networks has no effect on the direction of Yageo Corp i.e., Yageo Corp and Senao Networks go up and down completely randomly.
Pair Corralation between Yageo Corp and Senao Networks
Assuming the 90 days trading horizon Yageo Corp is expected to under-perform the Senao Networks. But the stock apears to be less risky and, when comparing its historical volatility, Yageo Corp is 2.51 times less risky than Senao Networks. The stock trades about -0.22 of its potential returns per unit of risk. The Senao Networks is currently generating about 0.42 of returns per unit of risk over similar time horizon. If you would invest 14,200 in Senao Networks on September 1, 2024 and sell it today you would earn a total of 6,450 from holding Senao Networks or generate 45.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yageo Corp vs. Senao Networks
Performance |
| Timeline |
| Yageo Corp |
| Senao Networks |
Yageo Corp and Senao Networks Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yageo Corp and Senao Networks
The main advantage of trading using opposite Yageo Corp and Senao Networks positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yageo Corp position performs unexpectedly, Senao Networks 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 Senao Networks will offset losses from the drop in Senao Networks' long position.| Yageo Corp vs. Chicony Power Technology | Yageo Corp vs. AzureWave Technologies | Yageo Corp vs. United Radiant Technology | Yageo Corp vs. Arbor Technology |
| Senao Networks vs. Group Up Industrial | Senao Networks vs. Wiwynn Corp | Senao Networks vs. Senao International Co | Senao Networks vs. San Neng Group |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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