Correlation Between Yes Optoelectronics and Telling Telecommunicatio

Can any of the company-specific risk be diversified away by investing in both Yes Optoelectronics and Telling Telecommunicatio 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 Yes Optoelectronics and Telling Telecommunicatio into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Yes Optoelectronics Co and Telling Telecommunication Holding, you can compare the effects of market volatilities on Yes Optoelectronics and Telling Telecommunicatio 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 Yes Optoelectronics with a short position of Telling Telecommunicatio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Optoelectronics and Telling Telecommunicatio.

Diversification Opportunities for Yes Optoelectronics and Telling Telecommunicatio

0.81

Correlation Coefficient

Yes Optoelectronics  Telling Telecommunicatio

Very poor diversification

The 3 months correlation between Yes and Telling is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Yes Optoelectronics Co and Telling Telecommunication Hold in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Telling Telecommunicatio and Yes Optoelectronics 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 Yes Optoelectronics Co are associated (or correlated) with Telling Telecommunicatio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Telling Telecommunicatio has no effect on the direction of Yes Optoelectronics i.e., Yes Optoelectronics and Telling Telecommunicatio go up and down completely randomly.

Pair Corralation between Yes Optoelectronics and Telling Telecommunicatio

Assuming the 90 days trading horizon Yes Optoelectronics is expected to generate 10.72 times less return on investment than Telling Telecommunicatio. But when comparing it to its historical volatility, Yes Optoelectronics Co is 1.11 times less risky than Telling Telecommunicatio. It trades about 0.01 of its potential returns per unit of risk. Telling Telecommunication Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  893.00  in Telling Telecommunication Holding on October 24, 2024 and sell it today you would earn a total of  146.00  from holding Telling Telecommunication Holding or generate 16.35% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Strong
Accuracy	98.77%
Values	Daily Returns

Yes Optoelectronics Co  vs.  Telling Telecommunication Hold

Yes Optoelectronics

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yes Optoelectronics Co 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Telling Telecommunicatio

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Telling Telecommunication Holding 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 February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Yes Optoelectronics and Telling Telecommunicatio

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

The idea behind Yes Optoelectronics Co and Telling Telecommunication Holding 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.