Correlation Between Yealink Network and EMCORE

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

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

Diversification Opportunities for Yealink Network and EMCORE

-0.48

Correlation Coefficient

Yealink Network  EMCORE

Very good diversification

The 3 months correlation between Yealink and EMCORE is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Yealink Network Technology and EMCORE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EMCORE and Yealink Network 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 Yealink Network Technology are associated (or correlated) with EMCORE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EMCORE has no effect on the direction of Yealink Network i.e., Yealink Network and EMCORE go up and down completely randomly.

Pair Corralation between Yealink Network and EMCORE

Assuming the 90 days trading horizon Yealink Network Technology is expected to generate 0.86 times more return on investment than EMCORE. However, Yealink Network Technology is 1.16 times less risky than EMCORE. It trades about 0.52 of its potential returns per unit of risk. EMCORE is currently generating about -0.41 per unit of risk. If you would invest  2,512  in Yealink Network Technology on January 24, 2024 and sell it today you would earn a total of  996.00  from holding Yealink Network Technology or generate 39.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.0%
Values	Daily Returns

Yealink Network Technology  vs.  EMCORE

Yealink Network Tech

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Yealink Network Technology are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Yealink Network sustained solid returns over the last few months and may actually be approaching a breakup point.

EMCORE

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days EMCORE has generated negative risk-adjusted returns adding no value to investors with long positions. Even with unfluctuating performance in the last few months, the Stock's forward-looking signals remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Yealink Network and EMCORE

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

The idea behind Yealink Network Technology and EMCORE 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.