Correlation Between Yulon and CHC Resources
Can any of the company-specific risk be diversified away by investing in both Yulon and CHC Resources 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 CHC Resources 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 CHC Resources Corp, you can compare the effects of market volatilities on Yulon and CHC Resources 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 CHC Resources. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon and CHC Resources.
Diversification Opportunities for Yulon and CHC Resources
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and CHC is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Motor Co and CHC Resources Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CHC Resources 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 CHC Resources. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CHC Resources Corp has no effect on the direction of Yulon i.e., Yulon and CHC Resources go up and down completely randomly.
Pair Corralation between Yulon and CHC Resources
Assuming the 90 days trading horizon Yulon Motor Co is expected to under-perform the CHC Resources. In addition to that, Yulon is 1.78 times more volatile than CHC Resources Corp. It trades about -0.01 of its total potential returns per unit of risk. CHC Resources Corp is currently generating about 0.07 per unit of volatility. If you would invest 4,575 in CHC Resources Corp on August 25, 2024 and sell it today you would earn a total of 2,075 from holding CHC Resources Corp or generate 45.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Motor Co vs. CHC Resources Corp
Performance |
| Timeline |
| Yulon Motor |
| CHC Resources Corp |
Yulon and CHC Resources Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon and CHC Resources
The main advantage of trading using opposite Yulon and CHC Resources positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon position performs unexpectedly, CHC Resources 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 CHC Resources will offset losses from the drop in CHC Resources' long position.| Yulon vs. Taiwan Semiconductor Manufacturing | Yulon vs. Hon Hai Precision | Yulon vs. MediaTek | Yulon vs. Chunghwa Telecom Co |
| CHC Resources vs. China Steel Chemical | CHC Resources vs. Taiwan Secom Co | CHC Resources vs. Nak Sealing Technologies | CHC Resources vs. Sinyi Realty |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated |