Correlation Between Yes Optoelectronics and Cambricon Technologies

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Can any of the company-specific risk be diversified away by investing in both Yes Optoelectronics and Cambricon Technologies 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 Cambricon Technologies 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 Cambricon Technologies Corp, you can compare the effects of market volatilities on Yes Optoelectronics and Cambricon Technologies 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 Cambricon Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yes Optoelectronics and Cambricon Technologies.

Diversification Opportunities for Yes Optoelectronics and Cambricon Technologies

0.0
  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Yes and Cambricon is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yes Optoelectronics Co and Cambricon Technologies Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cambricon Technologies 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 Cambricon Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cambricon Technologies has no effect on the direction of Yes Optoelectronics i.e., Yes Optoelectronics and Cambricon Technologies go up and down completely randomly.

Pair Corralation between Yes Optoelectronics and Cambricon Technologies

If you would invest  1,717  in Yes Optoelectronics Co on October 9, 2024 and sell it today you would earn a total of  817.00  from holding Yes Optoelectronics Co or generate 47.58% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.21%
ValuesDaily Returns

Yes Optoelectronics Co  vs.  Cambricon Technologies Corp

 Performance 
       Timeline  
Yes Optoelectronics 

Risk-Adjusted Performance

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Compared to the overall equity markets, risk-adjusted returns on investments in Yes Optoelectronics Co are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yes Optoelectronics may actually be approaching a critical reversion point that can send shares even higher in February 2025.
Cambricon Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Good
Over the last 90 days Cambricon Technologies Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Cambricon Technologies is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Yes Optoelectronics and Cambricon Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Yes Optoelectronics and Cambricon Technologies

The main advantage of trading using opposite Yes Optoelectronics and Cambricon Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yes Optoelectronics position performs unexpectedly, Cambricon Technologies 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 Cambricon Technologies will offset losses from the drop in Cambricon Technologies' long position.
The idea behind Yes Optoelectronics Co and Cambricon Technologies Corp 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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..

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