Correlation Between Trade Van and Yuan High

Can any of the company-specific risk be diversified away by investing in both Trade Van and Yuan High 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 Trade Van and Yuan High into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Trade Van Information Services and Yuan High Tech Development, you can compare the effects of market volatilities on Trade Van and Yuan High 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 Trade Van with a short position of Yuan High. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trade Van and Yuan High.

Diversification Opportunities for Trade Van and Yuan High

0.58

Correlation Coefficient

Trade Van  Yuan High

Very weak diversification

The 3 months correlation between Trade and Yuan is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Trade Van Information Services and Yuan High Tech Development in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuan High Tech and Trade Van 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 Trade Van Information Services are associated (or correlated) with Yuan High. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuan High Tech has no effect on the direction of Trade Van i.e., Trade Van and Yuan High go up and down completely randomly.

Pair Corralation between Trade Van and Yuan High

Assuming the 90 days trading horizon Trade Van Information Services is expected to generate 0.52 times more return on investment than Yuan High. However, Trade Van Information Services is 1.91 times less risky than Yuan High. It trades about 0.06 of its potential returns per unit of risk. Yuan High Tech Development is currently generating about -0.05 per unit of risk. If you would invest  8,650  in Trade Van Information Services on December 27, 2024 and sell it today you would earn a total of  470.00  from holding Trade Van Information Services or generate 5.43% return on investment over 90 days.

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

Trade Van Information Services  vs.  Yuan High Tech Development

Trade Van Information

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Van Information Services are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Trade Van may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Yuan High Tech

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yuan High Tech Development has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the latest fuss on Wall Street may also be a sign of long-term gains for the venture sophisticated investors.

Pair Trading with Trade Van and Yuan High

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

The idea behind Trade Van Information Services and Yuan High Tech Development 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.