Correlation Between Yem Chio and Sinher Technology

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Can any of the company-specific risk be diversified away by investing in both Yem Chio and Sinher Technology 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 Yem Chio and Sinher Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yem Chio Co and Sinher Technology, you can compare the effects of market volatilities on Yem Chio and Sinher Technology 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 Yem Chio with a short position of Sinher Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yem Chio and Sinher Technology.

Diversification Opportunities for Yem Chio and Sinher Technology

0.45
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Yem and Sinher is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Yem Chio Co and Sinher Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sinher Technology and Yem Chio 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 Yem Chio Co are associated (or correlated) with Sinher Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sinher Technology has no effect on the direction of Yem Chio i.e., Yem Chio and Sinher Technology go up and down completely randomly.

Pair Corralation between Yem Chio and Sinher Technology

Assuming the 90 days trading horizon Yem Chio Co is expected to under-perform the Sinher Technology. But the stock apears to be less risky and, when comparing its historical volatility, Yem Chio Co is 1.24 times less risky than Sinher Technology. The stock trades about -0.19 of its potential returns per unit of risk. The Sinher Technology is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  3,435  in Sinher Technology on September 24, 2024 and sell it today you would lose (125.00) from holding Sinher Technology or give up 3.64% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Yem Chio Co  vs.  Sinher Technology

 Performance 
JavaScript chart by amCharts 3.21.15OctNovDec -15-10-50510
JavaScript chart by amCharts 3.21.154306 4999
       Timeline  
Yem Chio 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Yem Chio Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest abnormal performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec1717.51818.51919.5
Sinher Technology 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Sinher Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Sinher Technology is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.
JavaScript chart by amCharts 3.21.15OctNovDecNovDec32.53333.53434.53535.53636.537

Yem Chio and Sinher Technology Volatility Contrast

   Predicted Return Density   
JavaScript chart by amCharts 3.21.15-1.94-1.51-1.08-0.65-0.220.110.540.971.41.83 0.050.100.150.200.250.300.35
JavaScript chart by amCharts 3.21.154306 4999
       Returns  

Pair Trading with Yem Chio and Sinher Technology

The main advantage of trading using opposite Yem Chio and Sinher Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yem Chio position performs unexpectedly, Sinher Technology 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 Sinher Technology will offset losses from the drop in Sinher Technology's long position.
The idea behind Yem Chio Co and Sinher Technology 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.

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