Correlation Between Yulon Finance and Tong Yang
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Tong Yang 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 Yulon Finance and Tong Yang into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yulon Finance Corp and Tong Yang Industry, you can compare the effects of market volatilities on Yulon Finance and Tong Yang 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 Yulon Finance with a short position of Tong Yang. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Tong Yang.
Diversification Opportunities for Yulon Finance and Tong Yang
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yulon and Tong is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Tong Yang Industry in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Tong Yang Industry and Yulon Finance 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 Yulon Finance Corp are associated (or correlated) with Tong Yang. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Tong Yang Industry has no effect on the direction of Yulon Finance i.e., Yulon Finance and Tong Yang go up and down completely randomly.
Pair Corralation between Yulon Finance and Tong Yang
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Tong Yang. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 1.21 times less risky than Tong Yang. The stock trades about -0.09 of its potential returns per unit of risk. The Tong Yang Industry is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 11,550 in Tong Yang Industry on September 1, 2024 and sell it today you would earn a total of 300.00 from holding Tong Yang Industry or generate 2.6% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Yulon Finance Corp vs. Tong Yang Industry
Performance |
| Timeline |
| Yulon Finance Corp |
| Tong Yang Industry |
Yulon Finance and Tong Yang Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Tong Yang
The main advantage of trading using opposite Yulon Finance and Tong Yang positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Tong Yang 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 Tong Yang will offset losses from the drop in Tong Yang's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
| Tong Yang vs. Chaintech Technology Corp | Tong Yang vs. AVerMedia Technologies | Tong Yang vs. Avision | Tong Yang vs. Clevo 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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