Correlation Between Hota Industrial and Yusin Holding

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

By analyzing existing cross correlation between Hota Industrial Mfg and Yusin Holding Corp, you can compare the effects of market volatilities on Hota Industrial and Yusin Holding 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 Hota Industrial with a short position of Yusin Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hota Industrial and Yusin Holding.

Diversification Opportunities for Hota Industrial and Yusin Holding

0.12

Correlation Coefficient

Hota Industrial  Yusin Holding

Average diversification

The 3 months correlation between Hota and Yusin is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Hota Industrial Mfg and Yusin Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yusin Holding Corp and Hota Industrial 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 Hota Industrial Mfg are associated (or correlated) with Yusin Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yusin Holding Corp has no effect on the direction of Hota Industrial i.e., Hota Industrial and Yusin Holding go up and down completely randomly.

Pair Corralation between Hota Industrial and Yusin Holding

Assuming the 90 days trading horizon Hota Industrial is expected to generate 2.42 times less return on investment than Yusin Holding. In addition to that, Hota Industrial is 1.39 times more volatile than Yusin Holding Corp. It trades about 0.02 of its total potential returns per unit of risk. Yusin Holding Corp is currently generating about 0.06 per unit of volatility. If you would invest  12,550  in Yusin Holding Corp on September 12, 2024 and sell it today you would earn a total of  800.00  from holding Yusin Holding Corp or generate 6.37% return on investment over 90 days.

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

Hota Industrial Mfg  vs.  Yusin Holding Corp

Hota Industrial Mfg

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Hota Industrial Mfg are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Hota Industrial is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yusin Holding Corp

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yusin Holding Corp are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yusin Holding may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Hota Industrial and Yusin Holding

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

The idea behind Hota Industrial Mfg and Yusin Holding 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.