Correlation Between Yieh United and Asia Electronic

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

By analyzing existing cross correlation between Yieh United Steel and Asia Electronic Material, you can compare the effects of market volatilities on Yieh United and Asia Electronic 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 Yieh United with a short position of Asia Electronic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yieh United and Asia Electronic.

Diversification Opportunities for Yieh United and Asia Electronic

-0.09

Correlation Coefficient

Yieh United  Asia Electronic

Good diversification

The 3 months correlation between Yieh and Asia is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Yieh United Steel and Asia Electronic Material in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Electronic Material and Yieh United 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 Yieh United Steel are associated (or correlated) with Asia Electronic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Electronic Material has no effect on the direction of Yieh United i.e., Yieh United and Asia Electronic go up and down completely randomly.

Pair Corralation between Yieh United and Asia Electronic

Assuming the 90 days trading horizon Yieh United Steel is expected to generate 2.11 times more return on investment than Asia Electronic. However, Yieh United is 2.11 times more volatile than Asia Electronic Material. It trades about 0.04 of its potential returns per unit of risk. Asia Electronic Material is currently generating about -0.02 per unit of risk. If you would invest  619.00  in Yieh United Steel on December 22, 2024 and sell it today you would earn a total of  22.00  from holding Yieh United Steel or generate 3.55% return on investment over 90 days.

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

Yieh United Steel  vs.  Asia Electronic Material

Yieh United Steel

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Yieh United Steel are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Yieh United is not utilizing all of its potentials. The newest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Asia Electronic Material

Risk-Adjusted Performance

Very Weak

Over the last 90 days Asia Electronic Material has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Asia Electronic is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with Yieh United and Asia Electronic

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

The idea behind Yieh United Steel and Asia Electronic Material 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.