Correlation Between YAOKO CO and Nucor
Can any of the company-specific risk be diversified away by investing in both YAOKO CO and Nucor 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 YAOKO CO and Nucor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between YAOKO LTD and Nucor, you can compare the effects of market volatilities on YAOKO CO and Nucor 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 YAOKO CO with a short position of Nucor. Check out your portfolio center. Please also check ongoing floating volatility patterns of YAOKO CO and Nucor.
Diversification Opportunities for YAOKO CO and Nucor
Excellent diversification
The 3 months correlation between YAOKO and Nucor is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding YAOKO LTD and Nucor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nucor and YAOKO CO 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 YAOKO LTD are associated (or correlated) with Nucor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nucor has no effect on the direction of YAOKO CO i.e., YAOKO CO and Nucor go up and down completely randomly.
Pair Corralation between YAOKO CO and Nucor
Assuming the 90 days horizon YAOKO CO is expected to generate 4.29 times less return on investment than Nucor. But when comparing it to its historical volatility, YAOKO LTD is 3.31 times less risky than Nucor. It trades about 0.07 of its potential returns per unit of risk. Nucor is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 13,654 in Nucor on August 28, 2024 and sell it today you would earn a total of 926.00 from holding Nucor or generate 6.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
YAOKO LTD vs. Nucor
Performance |
| Timeline |
| YAOKO LTD |
| Nucor |
YAOKO CO and Nucor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with YAOKO CO and Nucor
The main advantage of trading using opposite YAOKO CO and Nucor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if YAOKO CO position performs unexpectedly, Nucor 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 Nucor will offset losses from the drop in Nucor's long position.| YAOKO CO vs. Superior Plus Corp | YAOKO CO vs. NMI Holdings | YAOKO CO vs. Origin Agritech | YAOKO CO vs. SIVERS SEMICONDUCTORS AB |
| Nucor vs. SHIP HEALTHCARE HLDGINC | Nucor vs. ATRYS HEALTH SA | Nucor vs. National Health Investors | Nucor vs. MICRONIC MYDATA |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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