Correlation Between Yulon Finance and Lily Textile
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Lily Textile 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 Lily Textile 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 Lily Textile Co, you can compare the effects of market volatilities on Yulon Finance and Lily Textile 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 Lily Textile. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Lily Textile.
Diversification Opportunities for Yulon Finance and Lily Textile
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Yulon and Lily is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Lily Textile Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lily Textile 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 Lily Textile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lily Textile has no effect on the direction of Yulon Finance i.e., Yulon Finance and Lily Textile go up and down completely randomly.
Pair Corralation between Yulon Finance and Lily Textile
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Lily Textile. In addition to that, Yulon Finance is 1.88 times more volatile than Lily Textile Co. It trades about -0.3 of its total potential returns per unit of risk. Lily Textile Co is currently generating about -0.1 per unit of volatility. If you would invest 3,375 in Lily Textile Co on September 1, 2024 and sell it today you would lose (110.00) from holding Lily Textile Co or give up 3.26% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Yulon Finance Corp vs. Lily Textile Co
Performance |
| Timeline |
| Yulon Finance Corp |
| Lily Textile |
Yulon Finance and Lily Textile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Lily Textile
The main advantage of trading using opposite Yulon Finance and Lily Textile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Lily Textile 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 Lily Textile will offset losses from the drop in Lily Textile's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
| Lily Textile vs. Chaintech Technology Corp | Lily Textile vs. AVerMedia Technologies | Lily Textile vs. Avision | Lily Textile 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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