Correlation Between Yes Optoelectronics and GalaxyCore

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

Diversification Opportunities for Yes Optoelectronics and GalaxyCore

0.58

Correlation Coefficient

Yes Optoelectronics  GalaxyCore

Very weak diversification

The 3 months correlation between Yes and GalaxyCore is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Yes Optoelectronics Co and GalaxyCore in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GalaxyCore 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 GalaxyCore. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GalaxyCore has no effect on the direction of Yes Optoelectronics i.e., Yes Optoelectronics and GalaxyCore go up and down completely randomly.

Pair Corralation between Yes Optoelectronics and GalaxyCore

Assuming the 90 days trading horizon Yes Optoelectronics Co is expected to under-perform the GalaxyCore. In addition to that, Yes Optoelectronics is 2.19 times more volatile than GalaxyCore. It trades about -0.16 of its total potential returns per unit of risk. GalaxyCore is currently generating about -0.24 per unit of volatility. If you would invest  1,506  in GalaxyCore on October 24, 2024 and sell it today you would lose (177.00) from holding GalaxyCore or give up 11.75% of portfolio value over 90 days.

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

Yes Optoelectronics Co  vs.  GalaxyCore

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.

GalaxyCore

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GalaxyCore 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 GalaxyCore

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

The idea behind Yes Optoelectronics Co and GalaxyCore 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.