Correlation Between Yeong Guan and Basso Industry
Can any of the company-specific risk be diversified away by investing in both Yeong Guan and Basso Industry 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 Yeong Guan and Basso Industry into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yeong Guan Energy and Basso Industry Corp, you can compare the effects of market volatilities on Yeong Guan and Basso Industry 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 Yeong Guan with a short position of Basso Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yeong Guan and Basso Industry.
Diversification Opportunities for Yeong Guan and Basso Industry
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yeong and Basso is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yeong Guan Energy and Basso Industry Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basso Industry Corp and Yeong Guan 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 Yeong Guan Energy are associated (or correlated) with Basso Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basso Industry Corp has no effect on the direction of Yeong Guan i.e., Yeong Guan and Basso Industry go up and down completely randomly.
Pair Corralation between Yeong Guan and Basso Industry
Assuming the 90 days trading horizon Yeong Guan Energy is expected to generate 1.98 times more return on investment than Basso Industry. However, Yeong Guan is 1.98 times more volatile than Basso Industry Corp. It trades about 0.41 of its potential returns per unit of risk. Basso Industry Corp is currently generating about 0.42 per unit of risk. If you would invest 3,680 in Yeong Guan Energy on November 29, 2024 and sell it today you would earn a total of 390.00 from holding Yeong Guan Energy or generate 10.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yeong Guan Energy vs. Basso Industry Corp
Performance |
| Timeline |
| Yeong Guan Energy |
| Basso Industry Corp |
Yeong Guan and Basso Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yeong Guan and Basso Industry
The main advantage of trading using opposite Yeong Guan and Basso Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yeong Guan position performs unexpectedly, Basso Industry 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 Basso Industry will offset losses from the drop in Basso Industry's long position.| Yeong Guan vs. TECO Electric Machinery | Yeong Guan vs. Swancor Holding Co | Yeong Guan vs. Airtac International Group | Yeong Guan vs. Grape King Bio |
| Basso Industry vs. Cheng Shin Rubber | Basso Industry vs. Kung Long Batteries | Basso Industry vs. Pou Chen Corp | Basso Industry vs. China Steel Chemical |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
Other Complementary Tools
| CEOs Directory Screen CEOs from public companies around the world | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance |