Correlation Between InPlay Oil and Yixin Group
Can any of the company-specific risk be diversified away by investing in both InPlay Oil and Yixin Group 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 InPlay Oil and Yixin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InPlay Oil Corp and Yixin Group Limited, you can compare the effects of market volatilities on InPlay Oil and Yixin Group 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 InPlay Oil with a short position of Yixin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of InPlay Oil and Yixin Group.
Diversification Opportunities for InPlay Oil and Yixin Group
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between InPlay and Yixin is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding InPlay Oil Corp and Yixin Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yixin Group Limited and InPlay Oil 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 InPlay Oil Corp are associated (or correlated) with Yixin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yixin Group Limited has no effect on the direction of InPlay Oil i.e., InPlay Oil and Yixin Group go up and down completely randomly.
Pair Corralation between InPlay Oil and Yixin Group
Assuming the 90 days trading horizon InPlay Oil Corp is expected to under-perform the Yixin Group. But the stock apears to be less risky and, when comparing its historical volatility, InPlay Oil Corp is 1.65 times less risky than Yixin Group. The stock trades about -0.04 of its potential returns per unit of risk. The Yixin Group Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 7.50 in Yixin Group Limited on September 4, 2024 and sell it today you would earn a total of 0.30 from holding Yixin Group Limited or generate 4.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
InPlay Oil Corp vs. Yixin Group Limited
Performance |
| Timeline |
| InPlay Oil Corp |
| Yixin Group Limited |
InPlay Oil and Yixin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InPlay Oil and Yixin Group
The main advantage of trading using opposite InPlay Oil and Yixin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InPlay Oil position performs unexpectedly, Yixin Group 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 Yixin Group will offset losses from the drop in Yixin Group's long position.The idea behind InPlay Oil Corp and Yixin Group Limited 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.| Yixin Group vs. Rayonier Advanced Materials | Yixin Group vs. InPlay Oil Corp | Yixin Group vs. USWE SPORTS AB | Yixin Group vs. ARISTOCRAT LEISURE |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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