Correlation Between Service Quality and Yi Jinn

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

By analyzing existing cross correlation between Service Quality Technology and Yi Jinn Industrial, you can compare the effects of market volatilities on Service Quality and Yi Jinn 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 Service Quality with a short position of Yi Jinn. Check out your portfolio center. Please also check ongoing floating volatility patterns of Service Quality and Yi Jinn.

Diversification Opportunities for Service Quality and Yi Jinn

-0.61

Correlation Coefficient

Service Quality  Yi Jinn

Excellent diversification

The 3 months correlation between Service and 1457 is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Service Quality Technology and Yi Jinn Industrial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yi Jinn Industrial and Service Quality 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 Service Quality Technology are associated (or correlated) with Yi Jinn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yi Jinn Industrial has no effect on the direction of Service Quality i.e., Service Quality and Yi Jinn go up and down completely randomly.

Pair Corralation between Service Quality and Yi Jinn

Assuming the 90 days trading horizon Service Quality Technology is expected to generate 2.52 times more return on investment than Yi Jinn. However, Service Quality is 2.52 times more volatile than Yi Jinn Industrial. It trades about 0.03 of its potential returns per unit of risk. Yi Jinn Industrial is currently generating about 0.04 per unit of risk. If you would invest  4,535  in Service Quality Technology on September 17, 2024 and sell it today you would earn a total of  395.00  from holding Service Quality Technology or generate 8.71% return on investment over 90 days.

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

Service Quality Technology  vs.  Yi Jinn Industrial

Service Quality Tech

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Service Quality Technology are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Service Quality may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Yi Jinn Industrial

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yi Jinn Industrial has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Yi Jinn 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 Service Quality and Yi Jinn

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

The idea behind Service Quality Technology and Yi Jinn Industrial 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.