Correlation Between Zig Sheng and Yulon Finance
Can any of the company-specific risk be diversified away by investing in both Zig Sheng 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 Zig Sheng and Yulon Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Zig Sheng Industrial and Yulon Finance Corp, you can compare the effects of market volatilities on Zig Sheng 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 Zig Sheng with a short position of Yulon Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Zig Sheng and Yulon Finance.
Diversification Opportunities for Zig Sheng and Yulon Finance
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Zig and Yulon is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Zig Sheng Industrial 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 Zig Sheng 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 Zig Sheng Industrial 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 Zig Sheng i.e., Zig Sheng and Yulon Finance go up and down completely randomly.
Pair Corralation between Zig Sheng and Yulon Finance
Assuming the 90 days trading horizon Zig Sheng Industrial is expected to generate 0.39 times more return on investment than Yulon Finance. However, Zig Sheng Industrial is 2.55 times less risky than Yulon Finance. It trades about -0.1 of its potential returns per unit of risk. Yulon Finance Corp is currently generating about -0.3 per unit of risk. If you would invest 1,025 in Zig Sheng Industrial on September 1, 2024 and sell it today you would lose (25.00) from holding Zig Sheng Industrial or give up 2.44% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Zig Sheng Industrial vs. Yulon Finance Corp
Performance |
| Timeline |
| Zig Sheng Industrial |
| Yulon Finance Corp |
Zig Sheng and Yulon Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Zig Sheng and Yulon Finance
The main advantage of trading using opposite Zig Sheng and Yulon Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Zig Sheng 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.| Zig Sheng vs. Chaintech Technology Corp | Zig Sheng vs. AVerMedia Technologies | Zig Sheng vs. Avision | Zig Sheng 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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