Correlation Between Yulon and Asia Cement
Can any of the company-specific risk be diversified away by investing in both Yulon and Asia Cement 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 Yulon and Asia Cement into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Motor Co and Asia Cement Corp, you can compare the effects of market volatilities on Yulon and Asia Cement 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 Yulon with a short position of Asia Cement. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon and Asia Cement.
Diversification Opportunities for Yulon and Asia Cement
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and Asia is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Motor Co and Asia Cement Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Asia Cement Corp and Yulon 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 Yulon Motor Co are associated (or correlated) with Asia Cement. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Asia Cement Corp has no effect on the direction of Yulon i.e., Yulon and Asia Cement go up and down completely randomly.
Pair Corralation between Yulon and Asia Cement
Assuming the 90 days trading horizon Yulon Motor Co is expected to under-perform the Asia Cement. In addition to that, Yulon is 2.01 times more volatile than Asia Cement Corp. It trades about -0.01 of its total potential returns per unit of risk. Asia Cement Corp is currently generating about 0.02 per unit of volatility. If you would invest 4,120 in Asia Cement Corp on August 25, 2024 and sell it today you would earn a total of 270.00 from holding Asia Cement Corp or generate 6.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Motor Co vs. Asia Cement Corp
Performance |
| Timeline |
| Yulon Motor |
| Asia Cement Corp |
Yulon and Asia Cement Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon and Asia Cement
The main advantage of trading using opposite Yulon and Asia Cement positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon position performs unexpectedly, Asia Cement 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 Asia Cement will offset losses from the drop in Asia Cement's long position.| Yulon vs. Taiwan Semiconductor Manufacturing | Yulon vs. Hon Hai Precision | Yulon vs. MediaTek | Yulon vs. Chunghwa Telecom Co |
| Asia Cement vs. Taiwan Cement Corp | Asia Cement vs. Far Eastern New | Asia Cement vs. Uni President Enterprises Corp | Asia Cement vs. Nan Ya Plastics |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
Other Complementary Tools
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities |