Correlation Between Evergreen International and Yulon
Can any of the company-specific risk be diversified away by investing in both Evergreen International and Yulon 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 Evergreen International and Yulon into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Evergreen International Storage and Yulon Motor Co, you can compare the effects of market volatilities on Evergreen International and Yulon 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 Evergreen International with a short position of Yulon. Check out your portfolio center. Please also check ongoing floating volatility patterns of Evergreen International and Yulon.
Diversification Opportunities for Evergreen International and Yulon
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Evergreen and Yulon is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Evergreen International Storag and Yulon Motor Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yulon Motor and Evergreen International 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 Evergreen International Storage are associated (or correlated) with Yulon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yulon Motor has no effect on the direction of Evergreen International i.e., Evergreen International and Yulon go up and down completely randomly.
Pair Corralation between Evergreen International and Yulon
Assuming the 90 days trading horizon Evergreen International Storage is expected to generate 0.79 times more return on investment than Yulon. However, Evergreen International Storage is 1.26 times less risky than Yulon. It trades about -0.02 of its potential returns per unit of risk. Yulon Motor Co is currently generating about -0.05 per unit of risk. If you would invest 3,360 in Evergreen International Storage on September 1, 2024 and sell it today you would lose (260.00) from holding Evergreen International Storage or give up 7.74% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Evergreen International Storag vs. Yulon Motor Co
Performance |
| Timeline |
| Evergreen International |
| Yulon Motor |
Evergreen International and Yulon Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Evergreen International and Yulon
The main advantage of trading using opposite Evergreen International and Yulon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Evergreen International position performs unexpectedly, Yulon 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 will offset losses from the drop in Yulon's long position.| Evergreen International vs. BES Engineering Co | Evergreen International vs. Continental Holdings Corp | Evergreen International vs. Kee Tai Properties | Evergreen International vs. Hung Sheng Construction |
| Yulon vs. China Motor Corp | Yulon vs. China Steel Corp | Yulon vs. Nan Ya Plastics | Yulon vs. Chang Hwa Commercial |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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