Correlation Between Yulon and New Asia
Can any of the company-specific risk be diversified away by investing in both Yulon and New Asia 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 New Asia 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 New Asia Construction, you can compare the effects of market volatilities on Yulon and New Asia 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 New Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon and New Asia.
Diversification Opportunities for Yulon and New Asia
Modest diversification
The 3 months correlation between Yulon and New is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Motor Co and New Asia Construction in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on New Asia Construction 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 New Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of New Asia Construction has no effect on the direction of Yulon i.e., Yulon and New Asia go up and down completely randomly.
Pair Corralation between Yulon and New Asia
Assuming the 90 days trading horizon Yulon Motor Co is expected to under-perform the New Asia. In addition to that, Yulon is 1.3 times more volatile than New Asia Construction. It trades about -0.04 of its total potential returns per unit of risk. New Asia Construction is currently generating about 0.28 per unit of volatility. If you would invest 1,200 in New Asia Construction on September 1, 2024 and sell it today you would earn a total of 135.00 from holding New Asia Construction or generate 11.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Motor Co vs. New Asia Construction
Performance |
| Timeline |
| Yulon Motor |
| New Asia Construction |
Yulon and New Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon and New Asia
The main advantage of trading using opposite Yulon and New Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon position performs unexpectedly, New Asia 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 New Asia will offset losses from the drop in New Asia's long position.| Yulon vs. China Motor Corp | Yulon vs. China Steel Corp | Yulon vs. Nan Ya Plastics | Yulon vs. Chang Hwa Commercial |
| New Asia vs. BES Engineering Co | New Asia vs. Continental Holdings Corp | New Asia vs. Kee Tai Properties | New Asia vs. Hung Sheng Construction |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Portfolio Holdings Check your current holdings and cash postion to detemine if your portfolio needs rebalancing | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins |