Correlation Between Yura Tech and YeSUN Tech

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

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

Diversification Opportunities for Yura Tech and YeSUN Tech

-0.15

Correlation Coefficient

Yura Tech  YeSUN Tech

Good diversification

The 3 months correlation between Yura and YeSUN is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Yura Tech Co 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 Yura Tech 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 Yura Tech Co 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 Yura Tech i.e., Yura Tech and YeSUN Tech go up and down completely randomly.

Pair Corralation between Yura Tech and YeSUN Tech

Assuming the 90 days trading horizon Yura Tech is expected to generate 3.45 times less return on investment than YeSUN Tech. But when comparing it to its historical volatility, Yura Tech Co is 4.73 times less risky than YeSUN Tech. It trades about 0.19 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  41,400  in YeSUN Tech CoLtd on October 22, 2024 and sell it today you would earn a total of  6,900  from holding YeSUN Tech CoLtd or generate 16.67% return on investment over 90 days.

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

Yura Tech Co  vs.  YeSUN Tech CoLtd

Yura Tech

Risk-Adjusted Performance

11 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Yura Tech Co are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yura Tech sustained solid returns over the last few months and may actually be approaching a breakup point.

YeSUN Tech CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Yura Tech and YeSUN Tech

The main advantage of trading using opposite Yura Tech and YeSUN Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yura Tech 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 Yura Tech Co 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.

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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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..