Correlation Between Sinomach Automobile and Yes Optoelectronics
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By analyzing existing cross correlation between Sinomach Automobile Co and Yes Optoelectronics Co, you can compare the effects of market volatilities on Sinomach Automobile and Yes Optoelectronics 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 Sinomach Automobile with a short position of Yes Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sinomach Automobile and Yes Optoelectronics.
Diversification Opportunities for Sinomach Automobile and Yes Optoelectronics
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Sinomach and Yes is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Sinomach Automobile Co and Yes Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yes Optoelectronics and Sinomach Automobile 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 Sinomach Automobile Co are associated (or correlated) with Yes Optoelectronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yes Optoelectronics has no effect on the direction of Sinomach Automobile i.e., Sinomach Automobile and Yes Optoelectronics go up and down completely randomly.
Pair Corralation between Sinomach Automobile and Yes Optoelectronics
Assuming the 90 days trading horizon Sinomach Automobile Co is expected to under-perform the Yes Optoelectronics. But the stock apears to be less risky and, when comparing its historical volatility, Sinomach Automobile Co is 1.4 times less risky than Yes Optoelectronics. The stock trades about -0.02 of its potential returns per unit of risk. The Yes Optoelectronics Co is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,769 in Yes Optoelectronics Co on October 15, 2024 and sell it today you would earn a total of 272.00 from holding Yes Optoelectronics Co or generate 15.38% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sinomach Automobile Co vs. Yes Optoelectronics Co
Performance |
| Timeline |
| Sinomach Automobile |
| Yes Optoelectronics |
Sinomach Automobile and Yes Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sinomach Automobile and Yes Optoelectronics
The main advantage of trading using opposite Sinomach Automobile and Yes Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sinomach Automobile position performs unexpectedly, Yes Optoelectronics 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 Yes Optoelectronics will offset losses from the drop in Yes Optoelectronics' long position.The idea behind Sinomach Automobile Co and Yes Optoelectronics Co 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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