Correlation Between Yeou Yih and Arima Communications
Can any of the company-specific risk be diversified away by investing in both Yeou Yih and Arima Communications 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 Yeou Yih and Arima Communications into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yeou Yih Steel and Arima Communications Corp, you can compare the effects of market volatilities on Yeou Yih and Arima Communications 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 Yeou Yih with a short position of Arima Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeou Yih and Arima Communications.
Diversification Opportunities for Yeou Yih and Arima Communications
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yeou and Arima is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Yeou Yih Steel and Arima Communications Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Arima Communications Corp and Yeou Yih 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 Yeou Yih Steel are associated (or correlated) with Arima Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Arima Communications Corp has no effect on the direction of Yeou Yih i.e., Yeou Yih and Arima Communications go up and down completely randomly.
Pair Corralation between Yeou Yih and Arima Communications
Assuming the 90 days trading horizon Yeou Yih Steel is expected to under-perform the Arima Communications. But the stock apears to be less risky and, when comparing its historical volatility, Yeou Yih Steel is 24.59 times less risky than Arima Communications. The stock trades about -0.07 of its potential returns per unit of risk. The Arima Communications Corp is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 400.00 in Arima Communications Corp on October 22, 2024 and sell it today you would earn a total of 1,425 from holding Arima Communications Corp or generate 356.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeou Yih Steel vs. Arima Communications Corp
Performance |
| Timeline |
| Yeou Yih Steel |
| Arima Communications Corp |
Yeou Yih and Arima Communications Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeou Yih and Arima Communications
The main advantage of trading using opposite Yeou Yih and Arima Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeou Yih position performs unexpectedly, Arima Communications 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 Arima Communications will offset losses from the drop in Arima Communications' long position.| Yeou Yih vs. WIN Semiconductors | Yeou Yih vs. First Insurance Co | Yeou Yih vs. Orient Semiconductor Electronics | Yeou Yih vs. Niko Semiconductor Co |
| Arima Communications vs. Silitech Technology Corp | Arima Communications vs. Merry Electronics Co | Arima Communications vs. Cheng Uei Precision | Arima Communications vs. Wistron NeWeb Corp |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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