Correlation Between Yulon Finance and BES Engineering
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and BES Engineering 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 BES Engineering 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 BES Engineering Co, you can compare the effects of market volatilities on Yulon Finance and BES Engineering 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 BES Engineering. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and BES Engineering.
Diversification Opportunities for Yulon Finance and BES Engineering
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and BES is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and BES Engineering Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BES Engineering 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 BES Engineering. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BES Engineering has no effect on the direction of Yulon Finance i.e., Yulon Finance and BES Engineering go up and down completely randomly.
Pair Corralation between Yulon Finance and BES Engineering
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the BES Engineering. In addition to that, Yulon Finance is 1.38 times more volatile than BES Engineering Co. It trades about -0.3 of its total potential returns per unit of risk. BES Engineering Co is currently generating about 0.07 per unit of volatility. If you would invest 1,085 in BES Engineering Co on August 31, 2024 and sell it today you would earn a total of 25.00 from holding BES Engineering Co or generate 2.3% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. BES Engineering Co
Performance |
| Timeline |
| Yulon Finance Corp |
| BES Engineering |
Yulon Finance and BES Engineering Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and BES Engineering
The main advantage of trading using opposite Yulon Finance and BES Engineering positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, BES Engineering 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 BES Engineering will offset losses from the drop in BES Engineering'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 |
| BES Engineering vs. Hung Sheng Construction | BES Engineering vs. Taiwan Glass Ind | BES Engineering vs. China Petrochemical Development | BES Engineering vs. Taiwan Tea Corp |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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