Correlation Between Ye Chiu and Glodon Software

Can any of the company-specific risk be diversified away by investing in both Ye Chiu and Glodon Software 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 Glodon Software 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 Glodon Software Co, you can compare the effects of market volatilities on Ye Chiu and Glodon Software 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 Glodon Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ye Chiu and Glodon Software.

Diversification Opportunities for Ye Chiu and Glodon Software

0.07

Correlation Coefficient

Ye Chiu  Glodon Software

Significant diversification

The 3 months correlation between 601388 and Glodon is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Ye Chiu Metal and Glodon Software Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Glodon Software 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 Glodon Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Glodon Software has no effect on the direction of Ye Chiu i.e., Ye Chiu and Glodon Software go up and down completely randomly.

Pair Corralation between Ye Chiu and Glodon Software

Assuming the 90 days trading horizon Ye Chiu Metal is expected to generate 0.81 times more return on investment than Glodon Software. However, Ye Chiu Metal is 1.24 times less risky than Glodon Software. It trades about -0.06 of its potential returns per unit of risk. Glodon Software Co is currently generating about -0.13 per unit of risk. If you would invest  271.00  in Ye Chiu Metal on October 7, 2024 and sell it today you would lose (32.00) from holding Ye Chiu Metal or give up 11.81% of portfolio value over 90 days.

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

Ye Chiu Metal  vs.  Glodon Software Co

Ye Chiu Metal

Risk-Adjusted Performance

0 of 100

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 latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Glodon Software

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Glodon Software Co has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Ye Chiu and Glodon Software

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

The idea behind Ye Chiu Metal and Glodon Software 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.