Correlation Between Global PMX and Yusin Holding

Can any of the company-specific risk be diversified away by investing in both Global PMX and Yusin Holding 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 Global PMX and Yusin Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Global PMX Co and Yusin Holding Corp, you can compare the effects of market volatilities on Global PMX and Yusin Holding 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 Global PMX with a short position of Yusin Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global PMX and Yusin Holding.

Diversification Opportunities for Global PMX and Yusin Holding

0.02

Correlation Coefficient

Global PMX  Yusin Holding

Significant diversification

The 3 months correlation between Global and Yusin is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Global PMX Co and Yusin Holding Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yusin Holding Corp and Global PMX 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 Global PMX Co are associated (or correlated) with Yusin Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yusin Holding Corp has no effect on the direction of Global PMX i.e., Global PMX and Yusin Holding go up and down completely randomly.

Pair Corralation between Global PMX and Yusin Holding

Assuming the 90 days trading horizon Global PMX Co is expected to generate 1.17 times more return on investment than Yusin Holding. However, Global PMX is 1.17 times more volatile than Yusin Holding Corp. It trades about -0.03 of its potential returns per unit of risk. Yusin Holding Corp is currently generating about -0.06 per unit of risk. If you would invest  10,800  in Global PMX Co on December 30, 2024 and sell it today you would lose (450.00) from holding Global PMX Co or give up 4.17% of portfolio value over 90 days.

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

Global PMX Co  vs.  Yusin Holding Corp

Global PMX

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global PMX Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Global PMX is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Yusin Holding Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yusin Holding Corp 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.

Pair Trading with Global PMX and Yusin Holding

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

The idea behind Global PMX Co and Yusin Holding Corp 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.

Check out your portfolio center.

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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.