Correlation Between Yulon Finance and Basso Industry
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Basso Industry 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 Basso Industry 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 Basso Industry Corp, you can compare the effects of market volatilities on Yulon Finance and Basso Industry 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 Basso Industry. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Basso Industry.
Diversification Opportunities for Yulon Finance and Basso Industry
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and Basso is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Basso Industry Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Basso Industry 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 Basso Industry. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Basso Industry Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and Basso Industry go up and down completely randomly.
Pair Corralation between Yulon Finance and Basso Industry
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Basso Industry. In addition to that, Yulon Finance is 2.35 times more volatile than Basso Industry Corp. It trades about -0.3 of its total potential returns per unit of risk. Basso Industry Corp is currently generating about -0.07 per unit of volatility. If you would invest 4,350 in Basso Industry Corp on September 2, 2024 and sell it today you would lose (80.00) from holding Basso Industry Corp or give up 1.84% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Basso Industry Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| Basso Industry Corp |
Yulon Finance and Basso Industry Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Basso Industry
The main advantage of trading using opposite Yulon Finance and Basso Industry positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Basso Industry 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 Basso Industry will offset losses from the drop in Basso Industry's long position.| Yulon Finance vs. Chailease Holding Co | Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical |
| Basso Industry vs. Chaintech Technology Corp | Basso Industry vs. Avision | Basso Industry vs. Clevo Co | Basso Industry vs. Elitegroup Computer Systems |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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