Correlation Between Lily Textile and Yulon Finance
Can any of the company-specific risk be diversified away by investing in both Lily Textile and Yulon Finance 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 Lily Textile and Yulon Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lily Textile Co and Yulon Finance Corp, you can compare the effects of market volatilities on Lily Textile and Yulon Finance 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 Lily Textile with a short position of Yulon Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lily Textile and Yulon Finance.
Diversification Opportunities for Lily Textile and Yulon Finance
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lily and Yulon is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Lily Textile Co and Yulon Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Finance Corp and Lily Textile 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 Lily Textile Co are associated (or correlated) with Yulon Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Finance Corp has no effect on the direction of Lily Textile i.e., Lily Textile and Yulon Finance go up and down completely randomly.
Pair Corralation between Lily Textile and Yulon Finance
Assuming the 90 days trading horizon Lily Textile Co is expected to generate 0.86 times more return on investment than Yulon Finance. However, Lily Textile Co is 1.16 times less risky than Yulon Finance. It trades about 0.02 of its potential returns per unit of risk. Yulon Finance Corp is currently generating about -0.09 per unit of risk. If you would invest 3,185 in Lily Textile Co on September 1, 2024 and sell it today you would earn a total of 80.00 from holding Lily Textile Co or generate 2.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.22% |
| Values | Daily Returns |
Lily Textile Co vs. Yulon Finance Corp
Performance |
| Timeline |
| Lily Textile |
| Yulon Finance Corp |
Lily Textile and Yulon Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lily Textile and Yulon Finance
The main advantage of trading using opposite Lily Textile and Yulon Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lily Textile position performs unexpectedly, Yulon Finance 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 Finance will offset losses from the drop in Yulon Finance's long position.| Lily Textile vs. Chaintech Technology Corp | Lily Textile vs. AVerMedia Technologies | Lily Textile vs. Avision | Lily Textile vs. Clevo Co |
| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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