Correlation Between Servyou Software and Yunnan Yuntianhua

Can any of the company-specific risk be diversified away by investing in both Servyou Software and Yunnan Yuntianhua 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 Servyou Software and Yunnan Yuntianhua into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Servyou Software Group and Yunnan Yuntianhua Co, you can compare the effects of market volatilities on Servyou Software and Yunnan Yuntianhua 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 Servyou Software with a short position of Yunnan Yuntianhua. Check out your portfolio center. Please also check ongoing floating volatility patterns of Servyou Software and Yunnan Yuntianhua.

Diversification Opportunities for Servyou Software and Yunnan Yuntianhua

0.0

Correlation Coefficient

Servyou Software  Yunnan Yuntianhua

Pay attention - limited upside

The 3 months correlation between Servyou and Yunnan is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Servyou Software Group and Yunnan Yuntianhua Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunnan Yuntianhua and Servyou Software 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 Servyou Software Group are associated (or correlated) with Yunnan Yuntianhua. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunnan Yuntianhua has no effect on the direction of Servyou Software i.e., Servyou Software and Yunnan Yuntianhua go up and down completely randomly.

Pair Corralation between Servyou Software and Yunnan Yuntianhua

If you would invest  3,161  in Servyou Software Group on December 26, 2024 and sell it today you would earn a total of  1,239  from holding Servyou Software Group or generate 39.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.75%
Values	Daily Returns

Servyou Software Group  vs.  Yunnan Yuntianhua Co

Servyou Software

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Servyou Software Group are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Servyou Software sustained solid returns over the last few months and may actually be approaching a breakup point.

Yunnan Yuntianhua

Risk-Adjusted Performance

Very Weak

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

Pair Trading with Servyou Software and Yunnan Yuntianhua

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

The idea behind Servyou Software Group and Yunnan Yuntianhua 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.

Check out your portfolio center.

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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.