Correlation Between Marine Products and Yunhong Green

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

By analyzing existing cross correlation between Marine Products and Yunhong Green CTI, you can compare the effects of market volatilities on Marine Products and Yunhong Green 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 Marine Products with a short position of Yunhong Green. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marine Products and Yunhong Green.

Diversification Opportunities for Marine Products and Yunhong Green

-0.64

Correlation Coefficient

Marine Products  Yunhong Green

Excellent diversification

The 3 months correlation between Marine and Yunhong is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding Marine Products and Yunhong Green CTI in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yunhong Green CTI and Marine Products 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 Marine Products are associated (or correlated) with Yunhong Green. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yunhong Green CTI has no effect on the direction of Marine Products i.e., Marine Products and Yunhong Green go up and down completely randomly.

Pair Corralation between Marine Products and Yunhong Green

Considering the 90-day investment horizon Marine Products is expected to under-perform the Yunhong Green. But the stock apears to be less risky and, when comparing its historical volatility, Marine Products is 3.41 times less risky than Yunhong Green. The stock trades about -0.02 of its potential returns per unit of risk. The Yunhong Green CTI is currently generating about 0.22 of returns per unit of risk over similar time horizon. If you would invest  51.00  in Yunhong Green CTI on December 28, 2024 and sell it today you would earn a total of  63.00  from holding Yunhong Green CTI or generate 123.53% return on investment over 90 days.

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

Marine Products  vs.  Yunhong Green CTI

Marine Products

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marine Products has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Marine Products is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Yunhong Green CTI

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Yunhong Green CTI are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak technical and fundamental indicators, Yunhong Green revealed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Marine Products and Yunhong Green

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

The idea behind Marine Products and Yunhong Green CTI 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.