Correlation Between Yuanjie Semiconductor and Metallurgical

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

By analyzing existing cross correlation between Yuanjie Semiconductor Technology and Metallurgical of, you can compare the effects of market volatilities on Yuanjie Semiconductor and Metallurgical 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 Yuanjie Semiconductor with a short position of Metallurgical. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuanjie Semiconductor and Metallurgical.

Diversification Opportunities for Yuanjie Semiconductor and Metallurgical

0.2

Correlation Coefficient

Yuanjie Semiconductor  Metallurgical

Modest diversification

The 3 months correlation between Yuanjie and Metallurgical is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Yuanjie Semiconductor Technolo and Metallurgical of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Metallurgical and Yuanjie Semiconductor 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 Yuanjie Semiconductor Technology are associated (or correlated) with Metallurgical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Metallurgical has no effect on the direction of Yuanjie Semiconductor i.e., Yuanjie Semiconductor and Metallurgical go up and down completely randomly.

Pair Corralation between Yuanjie Semiconductor and Metallurgical

Assuming the 90 days trading horizon Yuanjie Semiconductor Technology is expected to generate 3.12 times more return on investment than Metallurgical. However, Yuanjie Semiconductor is 3.12 times more volatile than Metallurgical of. It trades about 0.16 of its potential returns per unit of risk. Metallurgical of is currently generating about -0.32 per unit of risk. If you would invest  13,255  in Yuanjie Semiconductor Technology on October 26, 2024 and sell it today you would earn a total of  1,745  from holding Yuanjie Semiconductor Technology or generate 13.16% return on investment over 90 days.

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

Yuanjie Semiconductor Technolo  vs.  Metallurgical of

Yuanjie Semiconductor

Risk-Adjusted Performance

0 of 100

Very Weak

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

Metallurgical

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Metallurgical of 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.

Pair Trading with Yuanjie Semiconductor and Metallurgical

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

The idea behind Yuanjie Semiconductor Technology and Metallurgical of 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.