Correlation Between Fortune Information and YoungQin International

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

By analyzing existing cross correlation between Fortune Information Systems and YoungQin International Co, you can compare the effects of market volatilities on Fortune Information and YoungQin 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 Fortune Information with a short position of YoungQin International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fortune Information and YoungQin International.

Diversification Opportunities for Fortune Information and YoungQin International

0.19

Correlation Coefficient

Fortune Information  YoungQin International

Average diversification

The 3 months correlation between Fortune and YoungQin is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Fortune Information Systems and YoungQin International Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YoungQin International and Fortune Information 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 Fortune Information Systems are associated (or correlated) with YoungQin International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YoungQin International has no effect on the direction of Fortune Information i.e., Fortune Information and YoungQin International go up and down completely randomly.

Pair Corralation between Fortune Information and YoungQin International

Assuming the 90 days trading horizon Fortune Information Systems is expected to generate 1.71 times more return on investment than YoungQin International. However, Fortune Information is 1.71 times more volatile than YoungQin International Co. It trades about 0.0 of its potential returns per unit of risk. YoungQin International Co is currently generating about -0.03 per unit of risk. If you would invest  3,030  in Fortune Information Systems on September 14, 2024 and sell it today you would lose (230.00) from holding Fortune Information Systems or give up 7.59% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	99.62%
Values	Daily Returns

Fortune Information Systems  vs.  YoungQin International Co

Fortune Information

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Fortune Information Systems are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Fortune Information showed solid returns over the last few months and may actually be approaching a breakup point.

YoungQin International

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in YoungQin International Co are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, YoungQin International may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Fortune Information and YoungQin International

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

The idea behind Fortune Information Systems and YoungQin International Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .