Correlation Between Sunny Friend and Yieh United
Can any of the company-specific risk be diversified away by investing in both Sunny Friend and Yieh United 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 Sunny Friend and Yieh United into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sunny Friend Environmental and Yieh United Steel, you can compare the effects of market volatilities on Sunny Friend and Yieh United 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 Sunny Friend with a short position of Yieh United. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sunny Friend and Yieh United.
Diversification Opportunities for Sunny Friend and Yieh United
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Sunny and Yieh is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Sunny Friend Environmental and Yieh United Steel in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yieh United Steel and Sunny Friend 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 Sunny Friend Environmental are associated (or correlated) with Yieh United. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yieh United Steel has no effect on the direction of Sunny Friend i.e., Sunny Friend and Yieh United go up and down completely randomly.
Pair Corralation between Sunny Friend and Yieh United
Assuming the 90 days trading horizon Sunny Friend Environmental is expected to under-perform the Yieh United. In addition to that, Sunny Friend is 1.06 times more volatile than Yieh United Steel. It trades about -0.07 of its total potential returns per unit of risk. Yieh United Steel is currently generating about -0.03 per unit of volatility. If you would invest 796.00 in Yieh United Steel on September 2, 2024 and sell it today you would lose (157.00) from holding Yieh United Steel or give up 19.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Sunny Friend Environmental vs. Yieh United Steel
Performance |
| Timeline |
| Sunny Friend Environ |
| Yieh United Steel |
Sunny Friend and Yieh United Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sunny Friend and Yieh United
The main advantage of trading using opposite Sunny Friend and Yieh United positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sunny Friend position performs unexpectedly, Yieh United 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 Yieh United will offset losses from the drop in Yieh United's long position.| Sunny Friend vs. Cleanaway Co | Sunny Friend vs. Taiwan Secom Co | Sunny Friend vs. ECOVE Environment Corp | Sunny Friend vs. TTET Union Corp |
| Yieh United vs. Basso Industry Corp | Yieh United vs. Chung Hsin Electric Machinery | Yieh United vs. TYC Brother Industrial | Yieh United vs. TECO Electric Machinery |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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