Correlation Between Yes Optoelectronics and China Merchants
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By analyzing existing cross correlation between Yes Optoelectronics Co and China Merchants Bank, you can compare the effects of market volatilities on Yes Optoelectronics and China Merchants 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 China Merchants. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Optoelectronics and China Merchants.
Diversification Opportunities for Yes Optoelectronics and China Merchants
0.25 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yes and China is 0.25. Overlapping area represents the amount of risk that can be diversified away by holding Yes Optoelectronics Co and China Merchants Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Merchants Bank 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 China Merchants. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Merchants Bank has no effect on the direction of Yes Optoelectronics i.e., Yes Optoelectronics and China Merchants go up and down completely randomly.
Pair Corralation between Yes Optoelectronics and China Merchants
Assuming the 90 days trading horizon Yes Optoelectronics Co is expected to generate 2.65 times more return on investment than China Merchants. However, Yes Optoelectronics is 2.65 times more volatile than China Merchants Bank. It trades about 0.04 of its potential returns per unit of risk. China Merchants Bank is currently generating about -0.07 per unit of risk. If you would invest 2,503 in Yes Optoelectronics Co on September 23, 2024 and sell it today you would earn a total of 74.00 from holding Yes Optoelectronics Co or generate 2.96% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yes Optoelectronics Co vs. China Merchants Bank
Performance |
Timeline |
Yes Optoelectronics |
China Merchants Bank |
Yes Optoelectronics and China Merchants Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yes Optoelectronics and China Merchants
The main advantage of trading using opposite Yes Optoelectronics and China Merchants positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yes Optoelectronics position performs unexpectedly, China Merchants 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 China Merchants will offset losses from the drop in China Merchants' long position.Yes Optoelectronics vs. Industrial and Commercial | Yes Optoelectronics vs. Kweichow Moutai Co | Yes Optoelectronics vs. Agricultural Bank of | Yes Optoelectronics vs. China Mobile Limited |
China Merchants vs. Kweichow Moutai Co | China Merchants vs. Contemporary Amperex Technology | China Merchants vs. G bits Network Technology | China Merchants vs. BYD Co Ltd |
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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