Correlation Between Yulong Eco and Smith Midland

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

By analyzing existing cross correlation between Yulong Eco Materials and Smith Midland Corp, you can compare the effects of market volatilities on Yulong Eco and Smith Midland 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 Yulong Eco with a short position of Smith Midland. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulong Eco and Smith Midland.

Diversification Opportunities for Yulong Eco and Smith Midland

0.0

Correlation Coefficient

Yulong Eco  Smith Midland

Pay attention - limited upside

The 3 months correlation between Yulong and Smith is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Yulong Eco Materials and Smith Midland Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Smith Midland Corp and Yulong Eco 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 Yulong Eco Materials are associated (or correlated) with Smith Midland. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Smith Midland Corp has no effect on the direction of Yulong Eco i.e., Yulong Eco and Smith Midland go up and down completely randomly.

Pair Corralation between Yulong Eco and Smith Midland

If you would invest (100.00) in Yulong Eco Materials on December 28, 2024 and sell it today you would earn a total of  100.00  from holding Yulong Eco Materials or generate -100.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

Yulong Eco Materials  vs.  Smith Midland Corp

Yulong Eco Materials

Risk-Adjusted Performance

Very Weak

Over the last 90 days Yulong Eco Materials has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy fundamental indicators, Yulong Eco is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Smith Midland Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Smith Midland Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's forward indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with Yulong Eco and Smith Midland

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

The idea behind Yulong Eco Materials and Smith Midland Corp 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 CEOs Directory module to screen CEOs from public companies around the world.