Correlation Between Huaku Development and Yulon Finance
Can any of the company-specific risk be diversified away by investing in both Huaku Development and Yulon Finance 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 Huaku Development and Yulon Finance into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Huaku Development Co and Yulon Finance Corp, you can compare the effects of market volatilities on Huaku Development and Yulon Finance 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 Huaku Development with a short position of Yulon Finance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Huaku Development and Yulon Finance.
Diversification Opportunities for Huaku Development and Yulon Finance
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Huaku and Yulon is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Huaku Development Co and Yulon Finance Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Finance Corp and Huaku Development 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 Huaku Development Co are associated (or correlated) with Yulon Finance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Finance Corp has no effect on the direction of Huaku Development i.e., Huaku Development and Yulon Finance go up and down completely randomly.
Pair Corralation between Huaku Development and Yulon Finance
Assuming the 90 days trading horizon Huaku Development Co is expected to generate 0.95 times more return on investment than Yulon Finance. However, Huaku Development Co is 1.06 times less risky than Yulon Finance. It trades about 0.08 of its potential returns per unit of risk. Yulon Finance Corp is currently generating about -0.3 per unit of risk. If you would invest 11,800 in Huaku Development Co on September 1, 2024 and sell it today you would earn a total of 400.00 from holding Huaku Development Co or generate 3.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Huaku Development Co vs. Yulon Finance Corp
Performance |
| Timeline |
| Huaku Development |
| Yulon Finance Corp |
Huaku Development and Yulon Finance Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Huaku Development and Yulon Finance
The main advantage of trading using opposite Huaku Development and Yulon Finance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Huaku Development position performs unexpectedly, Yulon Finance 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 Yulon Finance will offset losses from the drop in Yulon Finance's long position.| Huaku Development vs. Chong Hong Construction | Huaku Development vs. Highwealth Construction Corp | Huaku Development vs. Fubon Financial Holding | Huaku Development vs. CTBC Financial Holding |
| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Idea Optimizer Use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio |