Correlation Between AzureWave Technologies and Yungshin Construction

Can any of the company-specific risk be diversified away by investing in both AzureWave Technologies and Yungshin Construction 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 AzureWave Technologies and Yungshin Construction into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between AzureWave Technologies and Yungshin Construction Development, you can compare the effects of market volatilities on AzureWave Technologies and Yungshin Construction 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 AzureWave Technologies with a short position of Yungshin Construction. Check out your portfolio center. Please also check ongoing floating volatility patterns of AzureWave Technologies and Yungshin Construction.

Diversification Opportunities for AzureWave Technologies and Yungshin Construction

-0.62

Correlation Coefficient

AzureWave Technologies  Yungshin Construction

Excellent diversification

The 3 months correlation between AzureWave and Yungshin is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding AzureWave Technologies and Yungshin Construction Developm in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yungshin Construction and AzureWave Technologies 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 AzureWave Technologies are associated (or correlated) with Yungshin Construction. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yungshin Construction has no effect on the direction of AzureWave Technologies i.e., AzureWave Technologies and Yungshin Construction go up and down completely randomly.

Pair Corralation between AzureWave Technologies and Yungshin Construction

Assuming the 90 days trading horizon AzureWave Technologies is expected to generate 0.94 times more return on investment than Yungshin Construction. However, AzureWave Technologies is 1.07 times less risky than Yungshin Construction. It trades about 0.01 of its potential returns per unit of risk. Yungshin Construction Development is currently generating about -0.07 per unit of risk. If you would invest  5,140  in AzureWave Technologies on September 22, 2024 and sell it today you would lose (30.00) from holding AzureWave Technologies or give up 0.58% of portfolio value over 90 days.

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

AzureWave Technologies  vs.  Yungshin Construction Developm

AzureWave Technologies

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in AzureWave Technologies are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, AzureWave Technologies showed solid returns over the last few months and may actually be approaching a breakup point.

Yungshin Construction

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Yungshin Construction Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Pair Trading with AzureWave Technologies and Yungshin Construction

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

The idea behind AzureWave Technologies and Yungshin Construction Development 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.