Correlation Between YiDong Electronics and Anhui Shiny
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By analyzing existing cross correlation between YiDong Electronics Technology and Anhui Shiny Electronic, you can compare the effects of market volatilities on YiDong Electronics and Anhui Shiny 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 YiDong Electronics with a short position of Anhui Shiny. Check out your portfolio center. Please also check ongoing floating volatility patterns of YiDong Electronics and Anhui Shiny.
Diversification Opportunities for YiDong Electronics and Anhui Shiny
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between YiDong and Anhui is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding YiDong Electronics Technology and Anhui Shiny Electronic in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Anhui Shiny Electronic and YiDong Electronics 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 YiDong Electronics Technology are associated (or correlated) with Anhui Shiny. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Anhui Shiny Electronic has no effect on the direction of YiDong Electronics i.e., YiDong Electronics and Anhui Shiny go up and down completely randomly.
Pair Corralation between YiDong Electronics and Anhui Shiny
Assuming the 90 days trading horizon YiDong Electronics is expected to generate 1.62 times less return on investment than Anhui Shiny. But when comparing it to its historical volatility, YiDong Electronics Technology is 1.31 times less risky than Anhui Shiny. It trades about 0.07 of its potential returns per unit of risk. Anhui Shiny Electronic is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 954.00 in Anhui Shiny Electronic on October 29, 2024 and sell it today you would earn a total of 1,238 from holding Anhui Shiny Electronic or generate 129.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
YiDong Electronics Technology vs. Anhui Shiny Electronic
Performance |
| Timeline |
| YiDong Electronics |
| Anhui Shiny Electronic |
YiDong Electronics and Anhui Shiny Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YiDong Electronics and Anhui Shiny
The main advantage of trading using opposite YiDong Electronics and Anhui Shiny positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YiDong Electronics position performs unexpectedly, Anhui Shiny 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 Anhui Shiny will offset losses from the drop in Anhui Shiny's long position.The idea behind YiDong Electronics Technology and Anhui Shiny Electronic 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.
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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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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