Correlation Between Yulon Finance and Kaulin Mfg
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Kaulin Mfg 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 Kaulin Mfg 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 Kaulin Mfg, you can compare the effects of market volatilities on Yulon Finance and Kaulin Mfg 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 Kaulin Mfg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Kaulin Mfg.
Diversification Opportunities for Yulon Finance and Kaulin Mfg
-0.55 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Yulon and Kaulin is -0.55. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Kaulin Mfg in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaulin Mfg 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 Kaulin Mfg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaulin Mfg has no effect on the direction of Yulon Finance i.e., Yulon Finance and Kaulin Mfg go up and down completely randomly.
Pair Corralation between Yulon Finance and Kaulin Mfg
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Kaulin Mfg. In addition to that, Yulon Finance is 1.06 times more volatile than Kaulin Mfg. It trades about -0.07 of its total potential returns per unit of risk. Kaulin Mfg is currently generating about 0.04 per unit of volatility. If you would invest 1,465 in Kaulin Mfg on August 31, 2024 and sell it today you would earn a total of 260.00 from holding Kaulin Mfg or generate 17.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.73% |
| Values | Daily Returns |
Yulon Finance Corp vs. Kaulin Mfg
Performance |
| Timeline |
| Yulon Finance Corp |
| Kaulin Mfg |
Yulon Finance and Kaulin Mfg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Kaulin Mfg
The main advantage of trading using opposite Yulon Finance and Kaulin Mfg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Kaulin Mfg 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 Kaulin Mfg will offset losses from the drop in Kaulin Mfg'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 |
| Kaulin Mfg vs. BES Engineering Co | Kaulin Mfg vs. Continental Holdings Corp | Kaulin Mfg vs. Kee Tai Properties | Kaulin Mfg vs. Hung Sheng Construction |
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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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