Correlation Between Risesun Real and Yuanjie Semiconductor

Can any of the company-specific risk be diversified away by investing in both Risesun Real and Yuanjie Semiconductor 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 Risesun Real and Yuanjie Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Risesun Real Estate and Yuanjie Semiconductor Technology, you can compare the effects of market volatilities on Risesun Real and Yuanjie Semiconductor 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 Risesun Real with a short position of Yuanjie Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of Risesun Real and Yuanjie Semiconductor.

Diversification Opportunities for Risesun Real and Yuanjie Semiconductor

0.13

Correlation Coefficient

Risesun Real  Yuanjie Semiconductor

Average diversification

The 3 months correlation between Risesun and Yuanjie is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Risesun Real Estate and Yuanjie Semiconductor Technolo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuanjie Semiconductor and Risesun Real 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 Risesun Real Estate are associated (or correlated) with Yuanjie Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuanjie Semiconductor has no effect on the direction of Risesun Real i.e., Risesun Real and Yuanjie Semiconductor go up and down completely randomly.

Pair Corralation between Risesun Real and Yuanjie Semiconductor

Assuming the 90 days trading horizon Risesun Real is expected to generate 1.26 times less return on investment than Yuanjie Semiconductor. But when comparing it to its historical volatility, Risesun Real Estate is 1.32 times less risky than Yuanjie Semiconductor. It trades about 0.01 of its potential returns per unit of risk. Yuanjie Semiconductor Technology is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  15,089  in Yuanjie Semiconductor Technology on October 7, 2024 and sell it today you would lose (2,291) from holding Yuanjie Semiconductor Technology or give up 15.18% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Risesun Real Estate  vs.  Yuanjie Semiconductor Technolo

Risesun Real Estate

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Risesun Real Estate has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Yuanjie Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yuanjie Semiconductor Technology has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Risesun Real and Yuanjie Semiconductor

The main advantage of trading using opposite Risesun Real and Yuanjie Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Risesun Real position performs unexpectedly, Yuanjie Semiconductor 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 Yuanjie Semiconductor will offset losses from the drop in Yuanjie Semiconductor's long position.

The idea behind Risesun Real Estate and Yuanjie Semiconductor Technology 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 Stocks Directory module to find actively traded stocks across global markets.