Correlation Between NURAN WIRELESS and Yihai International

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

By analyzing existing cross correlation between NURAN WIRELESS INC and Yihai International Holding, you can compare the effects of market volatilities on NURAN WIRELESS and Yihai International 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 NURAN WIRELESS with a short position of Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of NURAN WIRELESS and Yihai International.

Diversification Opportunities for NURAN WIRELESS and Yihai International

0.28

Correlation Coefficient

NURAN WIRELESS  Yihai International

Modest diversification

The 3 months correlation between NURAN and Yihai is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding NURAN WIRELESS INC and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International and NURAN WIRELESS 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 NURAN WIRELESS INC are associated (or correlated) with Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of NURAN WIRELESS i.e., NURAN WIRELESS and Yihai International go up and down completely randomly.

Pair Corralation between NURAN WIRELESS and Yihai International

Assuming the 90 days trading horizon NURAN WIRELESS INC is expected to under-perform the Yihai International. In addition to that, NURAN WIRELESS is 1.88 times more volatile than Yihai International Holding. It trades about -0.03 of its total potential returns per unit of risk. Yihai International Holding is currently generating about 0.04 per unit of volatility. If you would invest  164.00  in Yihai International Holding on December 5, 2024 and sell it today you would earn a total of  7.00  from holding Yihai International Holding or generate 4.27% return on investment over 90 days.

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

NURAN WIRELESS INC  vs.  Yihai International Holding

NURAN WIRELESS INC

Risk-Adjusted Performance

Very Weak

Over the last 90 days NURAN WIRELESS INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Yihai International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yihai International Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yihai International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with NURAN WIRELESS and Yihai International

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

The idea behind NURAN WIRELESS INC and Yihai International 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.