Correlation Between Yulon Finance and Wan Hai
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Wan Hai 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 Wan Hai 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 Wan Hai Lines, you can compare the effects of market volatilities on Yulon Finance and Wan Hai 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 Wan Hai. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Wan Hai.
Diversification Opportunities for Yulon Finance and Wan Hai
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and Wan is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Wan Hai Lines in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wan Hai Lines 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 Wan Hai. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wan Hai Lines has no effect on the direction of Yulon Finance i.e., Yulon Finance and Wan Hai go up and down completely randomly.
Pair Corralation between Yulon Finance and Wan Hai
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Wan Hai. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 1.51 times less risky than Wan Hai. The stock trades about -0.09 of its potential returns per unit of risk. The Wan Hai Lines is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 8,230 in Wan Hai Lines on January 15, 2025 and sell it today you would lose (110.00) from holding Wan Hai Lines or give up 1.34% 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. Wan Hai Lines
Performance |
| Timeline |
| Yulon Finance Corp |
| Wan Hai Lines |
Yulon Finance and Wan Hai Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Wan Hai
The main advantage of trading using opposite Yulon Finance and Wan Hai positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Wan Hai 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 Wan Hai will offset losses from the drop in Wan Hai'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 |
| Wan Hai vs. Yang Ming Marine | Wan Hai vs. Evergreen Marine Corp | Wan Hai vs. Eva Airways Corp | Wan Hai vs. China Airlines |
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 Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |