Correlation Between Maywufa and YungShin Global

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

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

Diversification Opportunities for Maywufa and YungShin Global

0.62

Correlation Coefficient

Maywufa  YungShin Global

Poor diversification

The 3 months correlation between Maywufa and YungShin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Maywufa Co and YungShin Global Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YungShin Global Holding and Maywufa 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 Maywufa Co are associated (or correlated) with YungShin Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YungShin Global Holding has no effect on the direction of Maywufa i.e., Maywufa and YungShin Global go up and down completely randomly.

Pair Corralation between Maywufa and YungShin Global

Assuming the 90 days trading horizon Maywufa Co is expected to generate 0.56 times more return on investment than YungShin Global. However, Maywufa Co is 1.78 times less risky than YungShin Global. It trades about 0.16 of its potential returns per unit of risk. YungShin Global Holding is currently generating about 0.08 per unit of risk. If you would invest  2,270  in Maywufa Co on December 25, 2024 and sell it today you would earn a total of  125.00  from holding Maywufa Co or generate 5.51% return on investment over 90 days.

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

Maywufa Co  vs.  YungShin Global Holding

Maywufa

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Maywufa Co are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Maywufa is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

YungShin Global Holding

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in YungShin Global Holding are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, YungShin Global 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 Maywufa and YungShin Global

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

The idea behind Maywufa Co and YungShin Global Holding 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.