Correlation Between Yusin Holding and E Lead

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

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

Diversification Opportunities for Yusin Holding and E Lead

-0.42

Correlation Coefficient

Yusin Holding  E Lead

Very good diversification

The 3 months correlation between Yusin and 2497 is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Yusin Holding Corp and E Lead Electronic Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on E Lead Electronic and Yusin Holding 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 Yusin Holding Corp are associated (or correlated) with E Lead. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of E Lead Electronic has no effect on the direction of Yusin Holding i.e., Yusin Holding and E Lead go up and down completely randomly.

Pair Corralation between Yusin Holding and E Lead

Assuming the 90 days trading horizon Yusin Holding Corp is expected to generate 0.79 times more return on investment than E Lead. However, Yusin Holding Corp is 1.27 times less risky than E Lead. It trades about 0.04 of its potential returns per unit of risk. E Lead Electronic Co is currently generating about -0.01 per unit of risk. If you would invest  10,200  in Yusin Holding Corp on September 5, 2024 and sell it today you would earn a total of  3,300  from holding Yusin Holding Corp or generate 32.35% return on investment over 90 days.

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

Yusin Holding Corp  vs.  E Lead Electronic Co

Yusin Holding Corp

Risk-Adjusted Performance

10 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yusin Holding Corp are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yusin Holding showed solid returns over the last few months and may actually be approaching a breakup point.

E Lead Electronic

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days E Lead Electronic Co 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 Yusin Holding and E Lead

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

The idea behind Yusin Holding Corp and E Lead Electronic Co 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.