Correlation Between TRI CHEMICAL and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both TRI CHEMICAL and Yuexiu Transport 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 TRI CHEMICAL and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRI CHEMICAL LABORATINC and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on TRI CHEMICAL and Yuexiu Transport 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 TRI CHEMICAL with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRI CHEMICAL and Yuexiu Transport.
Diversification Opportunities for TRI CHEMICAL and Yuexiu Transport
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between TRI and Yuexiu is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding TRI CHEMICAL LABORATINC and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and TRI CHEMICAL 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 TRI CHEMICAL LABORATINC are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of TRI CHEMICAL i.e., TRI CHEMICAL and Yuexiu Transport go up and down completely randomly.
Pair Corralation between TRI CHEMICAL and Yuexiu Transport
Assuming the 90 days horizon TRI CHEMICAL is expected to generate 3.66 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, TRI CHEMICAL LABORATINC is 1.48 times less risky than Yuexiu Transport. It trades about 0.03 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 13.00 in Yuexiu Transport Infrastructure on October 13, 2024 and sell it today you would earn a total of 33.00 from holding Yuexiu Transport Infrastructure or generate 253.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRI CHEMICAL LABORATINC vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| TRI CHEMICAL LABORATINC |
| Yuexiu Transport Inf |
TRI CHEMICAL and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRI CHEMICAL and Yuexiu Transport
The main advantage of trading using opposite TRI CHEMICAL and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRI CHEMICAL position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| TRI CHEMICAL vs. Nishi Nippon Railroad Co | TRI CHEMICAL vs. BE Semiconductor Industries | TRI CHEMICAL vs. NXP Semiconductors NV | TRI CHEMICAL vs. Semiconductor Manufacturing International |
| Yuexiu Transport vs. KINGBOARD CHEMICAL | Yuexiu Transport vs. THRACE PLASTICS | Yuexiu Transport vs. TIANDE CHEMICAL | Yuexiu Transport vs. TRI CHEMICAL LABORATINC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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