Correlation Between Yulon and Eva Airways
Can any of the company-specific risk be diversified away by investing in both Yulon and Eva Airways 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 Eva Airways 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 Eva Airways Corp, you can compare the effects of market volatilities on Yulon and Eva Airways 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 Eva Airways. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon and Eva Airways.
Diversification Opportunities for Yulon and Eva Airways
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Yulon and Eva is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Motor Co and Eva Airways Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eva Airways 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 Eva Airways. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eva Airways Corp has no effect on the direction of Yulon i.e., Yulon and Eva Airways go up and down completely randomly.
Pair Corralation between Yulon and Eva Airways
Assuming the 90 days trading horizon Yulon Motor Co is expected to under-perform the Eva Airways. In addition to that, Yulon is 1.21 times more volatile than Eva Airways Corp. It trades about -0.08 of its total potential returns per unit of risk. Eva Airways Corp is currently generating about 0.08 per unit of volatility. If you would invest 3,535 in Eva Airways Corp on September 1, 2024 and sell it today you would earn a total of 620.00 from holding Eva Airways Corp or generate 17.54% 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. Eva Airways Corp
Performance |
| Timeline |
| Yulon Motor |
| Eva Airways Corp |
Yulon and Eva Airways Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon and Eva Airways
The main advantage of trading using opposite Yulon and Eva Airways positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon position performs unexpectedly, Eva Airways 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 Eva Airways will offset losses from the drop in Eva Airways' long position.| Yulon vs. China Motor Corp | Yulon vs. China Steel Corp | Yulon vs. Nan Ya Plastics | Yulon vs. Chang Hwa Commercial |
| Eva Airways vs. BES Engineering Co | Eva Airways vs. Continental Holdings Corp | Eva Airways vs. Kee Tai Properties | Eva Airways 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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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