Correlation Between Enlight Corp and Yulon

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

By analyzing existing cross correlation between Enlight Corp and Yulon Motor Co, you can compare the effects of market volatilities on Enlight Corp and Yulon 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 Enlight Corp with a short position of Yulon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Enlight Corp and Yulon.

Diversification Opportunities for Enlight Corp and Yulon

-0.32

Correlation Coefficient

Enlight Corp  Yulon

Very good diversification

The 3 months correlation between Enlight and Yulon is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Enlight Corp and Yulon Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Motor and Enlight Corp 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 Enlight Corp are associated (or correlated) with Yulon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Motor has no effect on the direction of Enlight Corp i.e., Enlight Corp and Yulon go up and down completely randomly.

Pair Corralation between Enlight Corp and Yulon

Assuming the 90 days trading horizon Enlight Corp is expected to under-perform the Yulon. In addition to that, Enlight Corp is 1.57 times more volatile than Yulon Motor Co. It trades about -0.11 of its total potential returns per unit of risk. Yulon Motor Co is currently generating about -0.1 per unit of volatility. If you would invest  5,960  in Yulon Motor Co on September 4, 2024 and sell it today you would lose (490.00) from holding Yulon Motor Co or give up 8.22% of portfolio value over 90 days.

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

Enlight Corp  vs.  Yulon Motor Co

Enlight Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Enlight Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain fairly stable which may send shares a bit higher in January 2025. The latest fuss may also be a sign of long-term up-swing for the venture sophisticated investors.

Yulon Motor

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Yulon Motor Co are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal basic indicators, Yulon may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Enlight Corp and Yulon

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

The idea behind Enlight Corp and Yulon Motor Co 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.

Check out your portfolio center.

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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.