Correlation Between TRAINLINE PLC and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both TRAINLINE PLC 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 TRAINLINE PLC and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between TRAINLINE PLC LS and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on TRAINLINE PLC 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 TRAINLINE PLC with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of TRAINLINE PLC and Yuexiu Transport.
Diversification Opportunities for TRAINLINE PLC and Yuexiu Transport
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between TRAINLINE and Yuexiu is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding TRAINLINE PLC LS 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 TRAINLINE PLC 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 TRAINLINE PLC LS 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 TRAINLINE PLC i.e., TRAINLINE PLC and Yuexiu Transport go up and down completely randomly.
Pair Corralation between TRAINLINE PLC and Yuexiu Transport
Assuming the 90 days trading horizon TRAINLINE PLC LS is expected to under-perform the Yuexiu Transport. In addition to that, TRAINLINE PLC is 1.63 times more volatile than Yuexiu Transport Infrastructure. It trades about -0.21 of its total potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.04 per unit of volatility. If you would invest 46.00 in Yuexiu Transport Infrastructure on November 3, 2024 and sell it today you would lose (1.00) from holding Yuexiu Transport Infrastructure or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
TRAINLINE PLC LS vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| TRAINLINE PLC LS |
| Yuexiu Transport Inf |
TRAINLINE PLC and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with TRAINLINE PLC and Yuexiu Transport
The main advantage of trading using opposite TRAINLINE PLC and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if TRAINLINE PLC 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.| TRAINLINE PLC vs. Tokyu Construction Co | TRAINLINE PLC vs. QBE Insurance Group | TRAINLINE PLC vs. Zurich Insurance Group | TRAINLINE PLC vs. Daito Trust Construction |
| Yuexiu Transport vs. Southwest Airlines Co | Yuexiu Transport vs. Westinghouse Air Brake | Yuexiu Transport vs. FORWARD AIR P | Yuexiu Transport vs. International Consolidated Airlines |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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