Correlation Between Bosera CMSK and Ming Yang

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Can any of the company-specific risk be diversified away by investing in both Bosera CMSK and Ming Yang 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 Bosera CMSK and Ming Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bosera CMSK Industrial and Ming Yang Smart, you can compare the effects of market volatilities on Bosera CMSK and Ming Yang 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 Bosera CMSK with a short position of Ming Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bosera CMSK and Ming Yang.

Diversification Opportunities for Bosera CMSK and Ming Yang

BoseraMingDiversified AwayBoseraMingDiversified Away100%
0.21
  Correlation Coefficient

Modest diversification

The 3 months correlation between Bosera and Ming is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Bosera CMSK Industrial and Ming Yang Smart in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ming Yang Smart and Bosera CMSK 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 Bosera CMSK Industrial are associated (or correlated) with Ming Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ming Yang Smart has no effect on the direction of Bosera CMSK i.e., Bosera CMSK and Ming Yang go up and down completely randomly.

Pair Corralation between Bosera CMSK and Ming Yang

Assuming the 90 days trading horizon Bosera CMSK is expected to generate 18.58 times less return on investment than Ming Yang. But when comparing it to its historical volatility, Bosera CMSK Industrial is 5.06 times less risky than Ming Yang. It trades about 0.08 of its potential returns per unit of risk. Ming Yang Smart is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest  834.00  in Ming Yang Smart on September 15, 2024 and sell it today you would earn a total of  608.00  from holding Ming Yang Smart or generate 72.9% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Weak
Accuracy100.0%
ValuesDaily Returns

Bosera CMSK Industrial  vs.  Ming Yang Smart

 Performance 
JavaScript chart by amCharts 3.21.15OctNov 0102030405060
JavaScript chart by amCharts 3.21.15180101 601615
       Timeline  
Bosera CMSK Industrial 

Risk-Adjusted Performance

5 of 100

 
Weak
 
Strong
Modest
Compared to the overall equity markets, risk-adjusted returns on investments in Bosera CMSK Industrial are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Bosera CMSK is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1.9522.052.1
Ming Yang Smart 

Risk-Adjusted Performance

21 of 100

 
Weak
 
Strong
Solid
Compared to the overall equity markets, risk-adjusted returns on investments in Ming Yang Smart are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Ming Yang sustained solid returns over the last few months and may actually be approaching a breakup point.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec89101112131415

Bosera CMSK and Ming Yang Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-2.23-1.66-1.09-0.520.02910.591.161.732.32.87 0.10.20.30.40.50.60.7
JavaScript chart by amCharts 3.21.15180101 601615
       Returns  

Pair Trading with Bosera CMSK and Ming Yang

The main advantage of trading using opposite Bosera CMSK and Ming Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bosera CMSK position performs unexpectedly, Ming Yang 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 Ming Yang will offset losses from the drop in Ming Yang's long position.
The idea behind Bosera CMSK Industrial and Ming Yang Smart 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.

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