Correlation Between Yungshin Construction and United Radiant

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

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

Diversification Opportunities for Yungshin Construction and United Radiant

-0.82

Correlation Coefficient

Yungshin Construction  United Radiant

Pay attention - limited upside

The 3 months correlation between Yungshin and United is -0.82. Overlapping area represents the amount of risk that can be diversified away by holding Yungshin Construction Developm and United Radiant Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on United Radiant Technology and Yungshin Construction 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 Yungshin Construction Development are associated (or correlated) with United Radiant. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of United Radiant Technology has no effect on the direction of Yungshin Construction i.e., Yungshin Construction and United Radiant go up and down completely randomly.

Pair Corralation between Yungshin Construction and United Radiant

Assuming the 90 days trading horizon Yungshin Construction Development is expected to generate 1.54 times more return on investment than United Radiant. However, Yungshin Construction is 1.54 times more volatile than United Radiant Technology. It trades about 0.1 of its potential returns per unit of risk. United Radiant Technology is currently generating about 0.03 per unit of risk. If you would invest  4,775  in Yungshin Construction Development on September 23, 2024 and sell it today you would earn a total of  8,825  from holding Yungshin Construction Development or generate 184.82% return on investment over 90 days.

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

Yungshin Construction Developm  vs.  United Radiant Technology

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.

United Radiant Technology

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in United Radiant Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, United Radiant may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Yungshin Construction and United Radiant

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

The idea behind Yungshin Construction Development and United Radiant 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 Stocks Directory module to find actively traded stocks across global markets.