Correlation Between Capital Futures and Yem Chio
Can any of the company-specific risk be diversified away by investing in both Capital Futures and Yem Chio 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 Capital Futures and Yem Chio into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Capital Futures Corp and Yem Chio Co, you can compare the effects of market volatilities on Capital Futures and Yem Chio 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 Capital Futures with a short position of Yem Chio. Check out your portfolio center. Please also check ongoing floating volatility patterns of Capital Futures and Yem Chio.
Diversification Opportunities for Capital Futures and Yem Chio
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Capital and Yem is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Capital Futures Corp and Yem Chio Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yem Chio and Capital Futures 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 Capital Futures Corp are associated (or correlated) with Yem Chio. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yem Chio has no effect on the direction of Capital Futures i.e., Capital Futures and Yem Chio go up and down completely randomly.
Pair Corralation between Capital Futures and Yem Chio
Assuming the 90 days trading horizon Capital Futures Corp is expected to generate 1.34 times more return on investment than Yem Chio. However, Capital Futures is 1.34 times more volatile than Yem Chio Co. It trades about 0.15 of its potential returns per unit of risk. Yem Chio Co is currently generating about -0.07 per unit of risk. If you would invest 5,640 in Capital Futures Corp on August 30, 2024 and sell it today you would earn a total of 220.00 from holding Capital Futures Corp or generate 3.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Capital Futures Corp vs. Yem Chio Co
Performance |
| Timeline |
| Capital Futures Corp |
| Yem Chio |
Capital Futures and Yem Chio Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Capital Futures and Yem Chio
The main advantage of trading using opposite Capital Futures and Yem Chio positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Capital Futures position performs unexpectedly, Yem Chio 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 Yem Chio will offset losses from the drop in Yem Chio's long position.| Capital Futures vs. Hung Sheng Construction | Capital Futures vs. Mercuries Life Insurance | Capital Futures vs. Sinher Technology | Capital Futures vs. YungShin Global Holding |
| Yem Chio vs. USI Corp | Yem Chio vs. Asia Polymer Corp | Yem Chio vs. Sincere Navigation Corp | Yem Chio vs. Lealea Enterprise Co |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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