Correlation Between Yungshin Construction and Shining Building

Can any of the company-specific risk be diversified away by investing in both Yungshin Construction and Shining Building 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 Shining Building 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 Shining Building Business, you can compare the effects of market volatilities on Yungshin Construction and Shining Building 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 Shining Building. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yungshin Construction and Shining Building.

Diversification Opportunities for Yungshin Construction and Shining Building

0.08

Correlation Coefficient

Yungshin Construction  Shining Building

Significant diversification

The 3 months correlation between Yungshin and Shining is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Yungshin Construction Developm and Shining Building Business in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shining Building Business 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 Shining Building. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shining Building Business has no effect on the direction of Yungshin Construction i.e., Yungshin Construction and Shining Building go up and down completely randomly.

Pair Corralation between Yungshin Construction and Shining Building

Assuming the 90 days trading horizon Yungshin Construction is expected to generate 1.1 times less return on investment than Shining Building. In addition to that, Yungshin Construction is 1.77 times more volatile than Shining Building Business. It trades about 0.05 of its total potential returns per unit of risk. Shining Building Business is currently generating about 0.09 per unit of volatility. If you would invest  1,035  in Shining Building Business on December 24, 2024 and sell it today you would earn a total of  70.00  from holding Shining Building Business or generate 6.76% return on investment over 90 days.

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

Yungshin Construction Developm  vs.  Shining Building Business

Yungshin Construction

Risk-Adjusted Performance

Weak

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

Shining Building Business

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Shining Building Business are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Shining Building may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Yungshin Construction and Shining Building

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

The idea behind Yungshin Construction Development and Shining Building Business 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.