Correlation Between Chun Yuan and Analog Integrations

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

By analyzing existing cross correlation between Chun Yuan Steel and Analog Integrations, you can compare the effects of market volatilities on Chun Yuan and Analog Integrations 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 Chun Yuan with a short position of Analog Integrations. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chun Yuan and Analog Integrations.

Diversification Opportunities for Chun Yuan and Analog Integrations

0.61

Correlation Coefficient

Chun Yuan  Analog Integrations

Poor diversification

The 3 months correlation between Chun and Analog is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Chun Yuan Steel and Analog Integrations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Analog Integrations and Chun Yuan 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 Chun Yuan Steel are associated (or correlated) with Analog Integrations. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Analog Integrations has no effect on the direction of Chun Yuan i.e., Chun Yuan and Analog Integrations go up and down completely randomly.

Pair Corralation between Chun Yuan and Analog Integrations

Assuming the 90 days trading horizon Chun Yuan Steel is expected to generate 0.38 times more return on investment than Analog Integrations. However, Chun Yuan Steel is 2.63 times less risky than Analog Integrations. It trades about 0.23 of its potential returns per unit of risk. Analog Integrations is currently generating about 0.05 per unit of risk. If you would invest  1,815  in Chun Yuan Steel on December 23, 2024 and sell it today you would earn a total of  285.00  from holding Chun Yuan Steel or generate 15.7% return on investment over 90 days.

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

Chun Yuan Steel  vs.  Analog Integrations

Chun Yuan Steel

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Chun Yuan Steel are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Chun Yuan showed solid returns over the last few months and may actually be approaching a breakup point.

Analog Integrations

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Analog Integrations are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Analog Integrations may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Chun Yuan and Analog Integrations

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

The idea behind Chun Yuan Steel and Analog Integrations 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.