Correlation Between Yulon Finance and Wisher Industrial
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Wisher 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 Wisher 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 Wisher Industrial Co, you can compare the effects of market volatilities on Yulon Finance and Wisher 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 Wisher Industrial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Wisher Industrial.
Diversification Opportunities for Yulon Finance and Wisher Industrial
0.85 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Yulon and Wisher is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Wisher Industrial Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wisher Industrial 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 Wisher Industrial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wisher Industrial has no effect on the direction of Yulon Finance i.e., Yulon Finance and Wisher Industrial go up and down completely randomly.
Pair Corralation between Yulon Finance and Wisher Industrial
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Wisher Industrial. In addition to that, Yulon Finance is 1.63 times more volatile than Wisher Industrial Co. It trades about -0.09 of its total potential returns per unit of risk. Wisher Industrial Co is currently generating about 0.05 per unit of volatility. If you would invest 1,315 in Wisher Industrial Co on September 1, 2024 and sell it today you would earn a total of 175.00 from holding Wisher Industrial Co or generate 13.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Wisher Industrial Co
Performance |
| Timeline |
| Yulon Finance Corp |
| Wisher Industrial |
Yulon Finance and Wisher Industrial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Wisher Industrial
The main advantage of trading using opposite Yulon Finance and Wisher Industrial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Wisher 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 Wisher Industrial will offset losses from the drop in Wisher Industrial's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
| Wisher Industrial vs. De Licacy Industrial | Wisher Industrial vs. Nien Hsing Textile | Wisher Industrial vs. Tainan Enterprises Co | Wisher Industrial vs. Tex Ray Industrial 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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