Correlation Between Yulon Finance and Wowprime Corp
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Wowprime Corp 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 Wowprime Corp 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 Wowprime Corp, you can compare the effects of market volatilities on Yulon Finance and Wowprime Corp 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 Wowprime Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Wowprime Corp.
Diversification Opportunities for Yulon Finance and Wowprime Corp
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yulon and Wowprime is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Wowprime Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wowprime 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 Wowprime Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wowprime Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and Wowprime Corp go up and down completely randomly.
Pair Corralation between Yulon Finance and Wowprime Corp
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Wowprime Corp. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 1.36 times less risky than Wowprime Corp. The stock trades about -0.03 of its potential returns per unit of risk. The Wowprime Corp is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 16,650 in Wowprime Corp on August 29, 2024 and sell it today you would earn a total of 6,850 from holding Wowprime Corp or generate 41.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. Wowprime Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| Wowprime Corp |
Yulon Finance and Wowprime Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Wowprime Corp
The main advantage of trading using opposite Yulon Finance and Wowprime Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Wowprime Corp 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 Wowprime Corp will offset losses from the drop in Wowprime Corp's long position.| Yulon Finance vs. Taiwan Secom Co | Yulon Finance vs. TTET Union Corp | Yulon Finance vs. China Steel Chemical | Yulon Finance vs. Taiwan Shin Kong |
| Wowprime Corp vs. Yulon Finance Corp | Wowprime Corp vs. Taiwan Secom Co | Wowprime Corp vs. Pou Chen Corp | Wowprime Corp vs. Great Wall Enterprise |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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