Correlation Between Ye Chiu and Tibet Huayu

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Can any of the company-specific risk be diversified away by investing in both Ye Chiu and Tibet Huayu 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 Tibet Huayu 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 Tibet Huayu Mining, you can compare the effects of market volatilities on Ye Chiu and Tibet Huayu 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 Tibet Huayu. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Tibet Huayu.

Diversification Opportunities for Ye Chiu and Tibet Huayu

601388TibetDiversified Away601388TibetDiversified Away100%
0.47
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 601388 and Tibet is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Tibet Huayu Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tibet Huayu Mining 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 Tibet Huayu. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tibet Huayu Mining has no effect on the direction of Ye Chiu i.e., Ye Chiu and Tibet Huayu go up and down completely randomly.

Pair Corralation between Ye Chiu and Tibet Huayu

Assuming the 90 days trading horizon Ye Chiu is expected to generate 47.43 times less return on investment than Tibet Huayu. But when comparing it to its historical volatility, Ye Chiu Metal is 1.4 times less risky than Tibet Huayu. It trades about 0.01 of its potential returns per unit of risk. Tibet Huayu Mining is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest  1,231  in Tibet Huayu Mining on December 2, 2024 and sell it today you would earn a total of  295.00  from holding Tibet Huayu Mining or generate 23.96% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ye Chiu Metal  vs.  Tibet Huayu Mining

 Performance 
JavaScript chart by amCharts 3.21.15Dec2025Feb -20-1001020
JavaScript chart by amCharts 3.21.15601388 601020
       Timeline  
Ye Chiu Metal 

Risk-Adjusted Performance

Very Weak

 
Weak
 
Strong
Over the last 90 days Ye Chiu Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar2.32.42.52.62.72.82.93
Tibet Huayu Mining 

Risk-Adjusted Performance

Insignificant

 
Weak
 
Strong
Compared to the overall equity markets, risk-adjusted returns on investments in Tibet Huayu Mining are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Tibet Huayu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15DecJanFebJanFebMar1212.51313.51414.51515.516

Ye Chiu and Tibet Huayu Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-3.44-2.57-1.71-0.850.00.771.552.333.12 0.060.070.080.09
JavaScript chart by amCharts 3.21.15601388 601020
       Returns  

Pair Trading with Ye Chiu and Tibet Huayu

The main advantage of trading using opposite Ye Chiu and Tibet Huayu positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, Tibet Huayu 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 Tibet Huayu will offset losses from the drop in Tibet Huayu's long position.
The idea behind Ye Chiu Metal and Tibet Huayu Mining 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.
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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