Correlation Between Yungshin Construction and Green World
Can any of the company-specific risk be diversified away by investing in both Yungshin Construction and Green World 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 Green World 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 Green World Fintech, you can compare the effects of market volatilities on Yungshin Construction and Green World 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 Green World. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yungshin Construction and Green World.
Diversification Opportunities for Yungshin Construction and Green World
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yungshin and Green is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Yungshin Construction Developm and Green World Fintech in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Green World Fintech 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 Green World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Green World Fintech has no effect on the direction of Yungshin Construction i.e., Yungshin Construction and Green World go up and down completely randomly.
Pair Corralation between Yungshin Construction and Green World
Assuming the 90 days trading horizon Yungshin Construction Development is expected to under-perform the Green World. But the stock apears to be less risky and, when comparing its historical volatility, Yungshin Construction Development is 1.29 times less risky than Green World. The stock trades about -0.08 of its potential returns per unit of risk. The Green World Fintech is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 3,371 in Green World Fintech on September 23, 2024 and sell it today you would earn a total of 2,829 from holding Green World Fintech or generate 83.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yungshin Construction Developm vs. Green World Fintech
Performance |
| Timeline |
| Yungshin Construction |
| Green World Fintech |
Yungshin Construction and Green World Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yungshin Construction and Green World
The main advantage of trading using opposite Yungshin Construction and Green World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yungshin Construction position performs unexpectedly, Green World 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 Green World will offset losses from the drop in Green World's long position.The idea behind Yungshin Construction Development and Green World Fintech pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.
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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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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