Correlation Between Dalian Thermal and Yes Optoelectronics
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By analyzing existing cross correlation between Dalian Thermal Power and Yes Optoelectronics Co, you can compare the effects of market volatilities on Dalian Thermal 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 Dalian Thermal with a short position of Yes Optoelectronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dalian Thermal and Yes Optoelectronics.
Diversification Opportunities for Dalian Thermal and Yes Optoelectronics
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Dalian and Yes is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Dalian Thermal Power and Yes Optoelectronics Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yes Optoelectronics and Dalian Thermal 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 Dalian Thermal Power 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 Dalian Thermal i.e., Dalian Thermal and Yes Optoelectronics go up and down completely randomly.
Pair Corralation between Dalian Thermal and Yes Optoelectronics
Assuming the 90 days trading horizon Dalian Thermal is expected to generate 1.4 times less return on investment than Yes Optoelectronics. But when comparing it to its historical volatility, Dalian Thermal Power is 1.08 times less risky than Yes Optoelectronics. It trades about 0.04 of its potential returns per unit of risk. Yes Optoelectronics Co is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,563 in Yes Optoelectronics Co on September 26, 2024 and sell it today you would earn a total of 1,061 from holding Yes Optoelectronics Co or generate 67.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dalian Thermal Power vs. Yes Optoelectronics Co
Performance |
| Timeline |
| Dalian Thermal Power |
| Yes Optoelectronics |
Dalian Thermal and Yes Optoelectronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dalian Thermal and Yes Optoelectronics
The main advantage of trading using opposite Dalian Thermal and Yes Optoelectronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dalian Thermal 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.| Dalian Thermal vs. Industrial and Commercial | Dalian Thermal vs. Agricultural Bank of | Dalian Thermal vs. China Construction Bank | Dalian Thermal vs. Bank of China |
| Yes Optoelectronics vs. Industrial and Commercial | Yes Optoelectronics vs. China Construction Bank | Yes Optoelectronics vs. Agricultural Bank of | Yes Optoelectronics vs. Bank of China |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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