Correlation Between Suntory Beverage and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Suntory Beverage 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 Suntory Beverage and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Suntory Beverage Food and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Suntory Beverage 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 Suntory Beverage with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Suntory Beverage and Yuexiu Transport.
Diversification Opportunities for Suntory Beverage and Yuexiu Transport
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Suntory and Yuexiu is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding Suntory Beverage Food 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 Suntory Beverage 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 Suntory Beverage Food 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 Suntory Beverage i.e., Suntory Beverage and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Suntory Beverage and Yuexiu Transport
Assuming the 90 days horizon Suntory Beverage is expected to generate 93.0 times less return on investment than Yuexiu Transport. But when comparing it to its historical volatility, Suntory Beverage Food is 2.34 times less risky than Yuexiu Transport. It trades about 0.0 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 25.00 in Yuexiu Transport Infrastructure on October 10, 2024 and sell it today you would earn a total of 21.00 from holding Yuexiu Transport Infrastructure or generate 84.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Suntory Beverage Food vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Suntory Beverage Food |
| Yuexiu Transport Inf |
Suntory Beverage and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Suntory Beverage and Yuexiu Transport
The main advantage of trading using opposite Suntory Beverage and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Suntory Beverage 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.| Suntory Beverage vs. Live Nation Entertainment | Suntory Beverage vs. PENN Entertainment | Suntory Beverage vs. Nufarm Limited | Suntory Beverage vs. Dairy Farm International |
| Yuexiu Transport vs. Algonquin Power Utilities | Yuexiu Transport vs. Chesapeake Utilities | Yuexiu Transport vs. GigaMedia | Yuexiu Transport vs. Hochschild Mining plc |
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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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