Correlation Between Fair Isaac and Yihai International

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

By analyzing existing cross correlation between Fair Isaac Corp and Yihai International Holding, you can compare the effects of market volatilities on Fair Isaac and Yihai International 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 Fair Isaac with a short position of Yihai International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fair Isaac and Yihai International.

Diversification Opportunities for Fair Isaac and Yihai International

0.13

Correlation Coefficient

Fair Isaac  Yihai International

Average diversification

The 3 months correlation between Fair and Yihai is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Fair Isaac Corp and Yihai International Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yihai International and Fair Isaac 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 Fair Isaac Corp are associated (or correlated) with Yihai International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yihai International has no effect on the direction of Fair Isaac i.e., Fair Isaac and Yihai International go up and down completely randomly.

Pair Corralation between Fair Isaac and Yihai International

Assuming the 90 days trading horizon Fair Isaac Corp is expected to under-perform the Yihai International. But the stock apears to be less risky and, when comparing its historical volatility, Fair Isaac Corp is 1.48 times less risky than Yihai International. The stock trades about -0.15 of its potential returns per unit of risk. The Yihai International Holding is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  164.00  in Yihai International Holding on December 4, 2024 and sell it today you would earn a total of  7.00  from holding Yihai International Holding or generate 4.27% return on investment over 90 days.

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

Fair Isaac Corp  vs.  Yihai International Holding

Fair Isaac Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fair Isaac Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Yihai International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Yihai International Holding are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Yihai International may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Fair Isaac and Yihai International

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

The idea behind Fair Isaac Corp and Yihai International Holding 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.