Correlation Between Ye Chiu and NAURA Technology

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

Diversification Opportunities for Ye Chiu and NAURA Technology

0.42
  Correlation Coefficient

Very weak diversification

The 3 months correlation between 601388 and NAURA is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and NAURA Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NAURA Technology and Ye Chiu 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 Ye Chiu Metal are associated (or correlated) with NAURA Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NAURA Technology has no effect on the direction of Ye Chiu i.e., Ye Chiu and NAURA Technology go up and down completely randomly.

Pair Corralation between Ye Chiu and NAURA Technology

Assuming the 90 days trading horizon Ye Chiu Metal is expected to under-perform the NAURA Technology. But the stock apears to be less risky and, when comparing its historical volatility, Ye Chiu Metal is 1.02 times less risky than NAURA Technology. The stock trades about -0.02 of its potential returns per unit of risk. The NAURA Technology Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  24,315  in NAURA Technology Group on October 13, 2024 and sell it today you would earn a total of  14,050  from holding NAURA Technology Group or generate 57.78% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Ye Chiu Metal  vs.  NAURA Technology Group

 Performance 
       Timeline  
Ye Chiu Metal 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days Ye Chiu Metal has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Ye Chiu is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.
NAURA Technology 

Risk-Adjusted Performance

2 of 100

 
Weak
 
Strong
Weak
Compared to the overall equity markets, risk-adjusted returns on investments in NAURA Technology Group are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, NAURA Technology is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Ye Chiu and NAURA Technology Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Ye Chiu and NAURA Technology

The main advantage of trading using opposite Ye Chiu and NAURA Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ye Chiu position performs unexpectedly, NAURA 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 NAURA Technology will offset losses from the drop in NAURA Technology's long position.
The idea behind Ye Chiu Metal and NAURA Technology Group 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 Commodity Directory module to find actively traded commodities issued by global exchanges.

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