Correlation Between Yulon Finance and Silicon Power
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Silicon Power 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 Yulon Finance and Silicon Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and Silicon Power Computer, you can compare the effects of market volatilities on Yulon Finance and Silicon Power 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 Yulon Finance with a short position of Silicon Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Silicon Power.
Diversification Opportunities for Yulon Finance and Silicon Power
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yulon and Silicon is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Silicon Power Computer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silicon Power Computer and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with Silicon Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silicon Power Computer has no effect on the direction of Yulon Finance i.e., Yulon Finance and Silicon Power go up and down completely randomly.
Pair Corralation between Yulon Finance and Silicon Power
Assuming the 90 days trading horizon Yulon Finance Corp is expected to generate 0.11 times more return on investment than Silicon Power. However, Yulon Finance Corp is 9.51 times less risky than Silicon Power. It trades about -0.1 of its potential returns per unit of risk. Silicon Power Computer is currently generating about -0.12 per unit of risk. If you would invest 5,150 in Yulon Finance Corp on October 4, 2024 and sell it today you would lose (20.00) from holding Yulon Finance Corp or give up 0.39% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Yulon Finance Corp vs. Silicon Power Computer
Performance |
Timeline |
Yulon Finance Corp |
Silicon Power Computer |
Yulon Finance and Silicon Power Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Yulon Finance and Silicon Power
The main advantage of trading using opposite Yulon Finance and Silicon Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Silicon Power 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 Silicon Power will offset losses from the drop in Silicon Power's long position.Yulon Finance vs. Chailease Holding Co | Yulon Finance vs. Yulon Finance Corp | Yulon Finance vs. Pou Chen Corp | Yulon Finance vs. Ruentex Industries |
Silicon Power vs. Quanta Computer | Silicon Power vs. Wiwynn Corp | Silicon Power vs. Quanta Storage | Silicon Power vs. Elitegroup Computer Systems |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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