Correlation Between Daol Investment and YeSUN Tech

Can any of the company-specific risk be diversified away by investing in both Daol Investment and YeSUN Tech 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 Daol Investment and YeSUN Tech into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Daol Investment Securities and YeSUN Tech CoLtd, you can compare the effects of market volatilities on Daol Investment and YeSUN Tech 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 Daol Investment with a short position of YeSUN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daol Investment and YeSUN Tech.

Diversification Opportunities for Daol Investment and YeSUN Tech

0.22

Correlation Coefficient

Daol Investment  YeSUN Tech

Modest diversification

The 3 months correlation between Daol and YeSUN is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Daol Investment Securities and YeSUN Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeSUN Tech CoLtd and Daol Investment 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 Daol Investment Securities are associated (or correlated) with YeSUN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeSUN Tech CoLtd has no effect on the direction of Daol Investment i.e., Daol Investment and YeSUN Tech go up and down completely randomly.

Pair Corralation between Daol Investment and YeSUN Tech

Assuming the 90 days trading horizon Daol Investment is expected to generate 3.68 times less return on investment than YeSUN Tech. But when comparing it to its historical volatility, Daol Investment Securities is 1.71 times less risky than YeSUN Tech. It trades about 0.01 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  40,400  in YeSUN Tech CoLtd on December 24, 2024 and sell it today you would lose (500.00) from holding YeSUN Tech CoLtd or give up 1.24% of portfolio value over 90 days.

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

Daol Investment Securities  vs.  YeSUN Tech CoLtd

Daol Investment Secu

Risk-Adjusted Performance

Weak

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

YeSUN Tech CoLtd

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in YeSUN Tech CoLtd are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, YeSUN Tech may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Daol Investment and YeSUN Tech

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

The idea behind Daol Investment Securities and YeSUN Tech CoLtd 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.