Correlation Between China Yongda and FONIX MOBILE

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

By analyzing existing cross correlation between China Yongda Automobiles and FONIX MOBILE PLC, you can compare the effects of market volatilities on China Yongda and FONIX MOBILE 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 China Yongda with a short position of FONIX MOBILE. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yongda and FONIX MOBILE.

Diversification Opportunities for China Yongda and FONIX MOBILE

0.08

Correlation Coefficient

China Yongda  FONIX MOBILE

Significant diversification

The 3 months correlation between China and FONIX is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding China Yongda Automobiles and FONIX MOBILE PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FONIX MOBILE PLC and China Yongda 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 China Yongda Automobiles are associated (or correlated) with FONIX MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FONIX MOBILE PLC has no effect on the direction of China Yongda i.e., China Yongda and FONIX MOBILE go up and down completely randomly.

Pair Corralation between China Yongda and FONIX MOBILE

Assuming the 90 days horizon China Yongda is expected to generate 1.36 times less return on investment than FONIX MOBILE. In addition to that, China Yongda is 2.43 times more volatile than FONIX MOBILE PLC. It trades about 0.04 of its total potential returns per unit of risk. FONIX MOBILE PLC is currently generating about 0.12 per unit of volatility. If you would invest  222.00  in FONIX MOBILE PLC on April 20, 2025 and sell it today you would earn a total of  32.00  from holding FONIX MOBILE PLC or generate 14.41% return on investment over 90 days.

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

China Yongda Automobiles  vs.  FONIX MOBILE PLC

China Yongda Automobiles

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in China Yongda Automobiles are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, China Yongda may actually be approaching a critical reversion point that can send shares even higher in August 2025.

FONIX MOBILE PLC

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FONIX MOBILE PLC are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly unsteady basic indicators, FONIX MOBILE reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with China Yongda and FONIX MOBILE

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

The idea behind China Yongda Automobiles and FONIX MOBILE PLC 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.