Correlation Between FnGuide and YeSUN Tech

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

By analyzing existing cross correlation between FnGuide and YeSUN Tech CoLtd, you can compare the effects of market volatilities on FnGuide and YeSUN Tech 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 FnGuide with a short position of YeSUN Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of FnGuide and YeSUN Tech.

Diversification Opportunities for FnGuide and YeSUN Tech

0.59

Correlation Coefficient

FnGuide  YeSUN Tech

Very weak diversification

The 3 months correlation between FnGuide and YeSUN is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding FnGuide and YeSUN Tech CoLtd in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on YeSUN Tech CoLtd and FnGuide 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 FnGuide are associated (or correlated) with YeSUN Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of YeSUN Tech CoLtd has no effect on the direction of FnGuide i.e., FnGuide and YeSUN Tech go up and down completely randomly.

Pair Corralation between FnGuide and YeSUN Tech

Assuming the 90 days trading horizon FnGuide is expected to generate 2.9 times more return on investment than YeSUN Tech. However, FnGuide is 2.9 times more volatile than YeSUN Tech CoLtd. It trades about -0.03 of its potential returns per unit of risk. YeSUN Tech CoLtd is currently generating about -0.17 per unit of risk. If you would invest  1,350,000  in FnGuide on September 13, 2024 and sell it today you would lose (537,000) from holding FnGuide or give up 39.78% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.28%
Values	Daily Returns

FnGuide  vs.  YeSUN Tech CoLtd

FnGuide

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FnGuide has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

YeSUN Tech CoLtd

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days YeSUN Tech CoLtd has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain somewhat strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with FnGuide and YeSUN Tech

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

The idea behind FnGuide and YeSUN Tech CoLtd 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.