Correlation Between Ye Chiu and Bus Online

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Can any of the company-specific risk be diversified away by investing in both Ye Chiu and Bus Online 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 Ye Chiu and Bus Online into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ye Chiu Metal and Bus Online Co, you can compare the effects of market volatilities on Ye Chiu and Bus Online 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 Ye Chiu with a short position of Bus Online. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Bus Online.

Diversification Opportunities for Ye Chiu and Bus Online

0.93
  Correlation Coefficient

Almost no diversification

The 3 months correlation between 601388 and Bus is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Bus Online Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bus Online and Ye Chiu 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 Ye Chiu Metal are associated (or correlated) with Bus Online. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bus Online has no effect on the direction of Ye Chiu i.e., Ye Chiu and Bus Online go up and down completely randomly.

Pair Corralation between Ye Chiu and Bus Online

Assuming the 90 days trading horizon Ye Chiu Metal is expected to generate 0.92 times more return on investment than Bus Online. However, Ye Chiu Metal is 1.09 times less risky than Bus Online. It trades about 0.06 of its potential returns per unit of risk. Bus Online Co is currently generating about 0.01 per unit of risk. If you would invest  223.00  in Ye Chiu Metal on September 27, 2024 and sell it today you would earn a total of  33.00  from holding Ye Chiu Metal or generate 14.8% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Ye Chiu Metal  vs.  Bus Online Co

 Performance 
       Timeline  
Ye Chiu Metal 

Risk-Adjusted Performance

4 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Ye Chiu Metal are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ye Chiu may actually be approaching a critical reversion point that can send shares even higher in January 2025.
Bus Online 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Bus Online Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Bus Online is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ye Chiu and Bus Online Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ye Chiu and Bus Online

The main advantage of trading using opposite Ye Chiu and Bus Online positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, Bus Online 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 Bus Online will offset losses from the drop in Bus Online's long position.
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The idea behind Ye Chiu Metal and Bus Online 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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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.

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