Correlation Between Yulon Finance and Carnival Industrial
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Carnival Industrial 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 Carnival Industrial 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 Carnival Industrial Corp, you can compare the effects of market volatilities on Yulon Finance and Carnival Industrial 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 Carnival Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Carnival Industrial.
Diversification Opportunities for Yulon Finance and Carnival Industrial
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and Carnival is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Carnival Industrial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carnival Industrial Corp 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 Carnival Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carnival Industrial Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and Carnival Industrial go up and down completely randomly.
Pair Corralation between Yulon Finance and Carnival Industrial
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Carnival Industrial. In addition to that, Yulon Finance is 3.82 times more volatile than Carnival Industrial Corp. It trades about -0.3 of its total potential returns per unit of risk. Carnival Industrial Corp is currently generating about -0.05 per unit of volatility. If you would invest 1,000.00 in Carnival Industrial Corp on September 1, 2024 and sell it today you would lose (7.00) from holding Carnival Industrial Corp or give up 0.7% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Carnival Industrial Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| Carnival Industrial Corp |
Yulon Finance and Carnival Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Carnival Industrial
The main advantage of trading using opposite Yulon Finance and Carnival Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Carnival Industrial 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 Carnival Industrial will offset losses from the drop in Carnival Industrial's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
| Carnival Industrial vs. Chaintech Technology Corp | Carnival Industrial vs. AVerMedia Technologies | Carnival Industrial vs. Avision | Carnival Industrial 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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