Correlation Between SanDi Properties and Yuan Jen

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

By analyzing existing cross correlation between SanDi Properties Co and Yuan Jen Enterprises, you can compare the effects of market volatilities on SanDi Properties and Yuan Jen 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 SanDi Properties with a short position of Yuan Jen. Check out your portfolio center. Please also check ongoing floating volatility patterns of SanDi Properties and Yuan Jen.

Diversification Opportunities for SanDi Properties and Yuan Jen

-0.11

Correlation Coefficient

SanDi Properties  Yuan Jen

Good diversification

The 3 months correlation between SanDi and Yuan is -0.11. Overlapping area represents the amount of risk that can be diversified away by holding SanDi Properties Co and Yuan Jen Enterprises in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan Jen Enterprises and SanDi Properties 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 SanDi Properties Co are associated (or correlated) with Yuan Jen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan Jen Enterprises has no effect on the direction of SanDi Properties i.e., SanDi Properties and Yuan Jen go up and down completely randomly.

Pair Corralation between SanDi Properties and Yuan Jen

Assuming the 90 days trading horizon SanDi Properties Co is expected to under-perform the Yuan Jen. But the stock apears to be less risky and, when comparing its historical volatility, SanDi Properties Co is 1.53 times less risky than Yuan Jen. The stock trades about -0.18 of its potential returns per unit of risk. The Yuan Jen Enterprises is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  3,620  in Yuan Jen Enterprises on December 29, 2024 and sell it today you would lose (185.00) from holding Yuan Jen Enterprises or give up 5.11% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.25%
Values	Daily Returns

SanDi Properties Co  vs.  Yuan Jen Enterprises

SanDi Properties

Risk-Adjusted Performance

Very Weak

Over the last 90 days SanDi Properties Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in April 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Yuan Jen Enterprises

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yuan Jen Enterprises has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yuan Jen is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with SanDi Properties and Yuan Jen

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

The idea behind SanDi Properties Co and Yuan Jen Enterprises 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.