Correlation Between Yungshin Construction and Wan Hai
Can any of the company-specific risk be diversified away by investing in both Yungshin Construction and Wan Hai 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 Yungshin Construction and Wan Hai into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yungshin Construction Development and Wan Hai Lines, you can compare the effects of market volatilities on Yungshin Construction and Wan Hai 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 Yungshin Construction with a short position of Wan Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yungshin Construction and Wan Hai.
Diversification Opportunities for Yungshin Construction and Wan Hai
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Yungshin and Wan is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding Yungshin Construction Developm and Wan Hai Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wan Hai Lines and Yungshin Construction 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 Yungshin Construction Development are associated (or correlated) with Wan Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wan Hai Lines has no effect on the direction of Yungshin Construction i.e., Yungshin Construction and Wan Hai go up and down completely randomly.
Pair Corralation between Yungshin Construction and Wan Hai
Assuming the 90 days trading horizon Yungshin Construction Development is expected to under-perform the Wan Hai. In addition to that, Yungshin Construction is 1.08 times more volatile than Wan Hai Lines. It trades about -0.28 of its total potential returns per unit of risk. Wan Hai Lines is currently generating about 0.1 per unit of volatility. If you would invest 8,860 in Wan Hai Lines on August 27, 2024 and sell it today you would earn a total of 500.00 from holding Wan Hai Lines or generate 5.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yungshin Construction Developm vs. Wan Hai Lines
Performance |
| Timeline |
| Yungshin Construction |
| Wan Hai Lines |
Yungshin Construction and Wan Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yungshin Construction and Wan Hai
The main advantage of trading using opposite Yungshin Construction and Wan Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yungshin Construction position performs unexpectedly, Wan Hai 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 Wan Hai will offset losses from the drop in Wan Hai's long position.| Yungshin Construction vs. ADLINK Technology | Yungshin Construction vs. Hunya Foods Co | Yungshin Construction vs. Simplo Technology Co | Yungshin Construction vs. Shan Loong Transportation Co |
| Wan Hai vs. Sunny Friend Environmental | Wan Hai vs. TTET Union Corp | Wan Hai vs. ECOVE Environment Corp | Wan Hai vs. Yulon Finance Corp |
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 Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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