Correlation Between Wha Yu and Yi Jinn

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

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

Diversification Opportunities for Wha Yu and Yi Jinn

-0.29

Correlation Coefficient

Wha Yu  Yi Jinn

Very good diversification

The 3 months correlation between Wha and 1457 is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Wha Yu Industrial 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 Wha Yu 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 Wha Yu Industrial 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 Wha Yu i.e., Wha Yu and Yi Jinn go up and down completely randomly.

Pair Corralation between Wha Yu and Yi Jinn

Assuming the 90 days trading horizon Wha Yu Industrial is expected to generate 3.69 times more return on investment than Yi Jinn. However, Wha Yu is 3.69 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 -0.07 per unit of risk. If you would invest  1,680  in Wha Yu Industrial on September 16, 2024 and sell it today you would earn a total of  55.00  from holding Wha Yu Industrial or generate 3.27% return on investment over 90 days.

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

Wha Yu Industrial  vs.  Yi Jinn Industrial

Wha Yu Industrial

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Wha Yu Industrial are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Wha Yu is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Wha Yu and Yi Jinn

The main advantage of trading using opposite Wha Yu and Yi Jinn positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wha Yu 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 Wha Yu Industrial 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.