Correlation Between Yulon Finance and FDC International
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and FDC International 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 FDC International 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 FDC International Hotels, you can compare the effects of market volatilities on Yulon Finance and FDC International 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 FDC International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and FDC International.
Diversification Opportunities for Yulon Finance and FDC International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Yulon and FDC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and FDC International Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FDC International Hotels 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 FDC International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FDC International Hotels has no effect on the direction of Yulon Finance i.e., Yulon Finance and FDC International go up and down completely randomly.
Pair Corralation between Yulon Finance and FDC International
Assuming the 90 days trading horizon Yulon Finance Corp is expected to generate 1.54 times more return on investment than FDC International. However, Yulon Finance is 1.54 times more volatile than FDC International Hotels. It trades about 0.19 of its potential returns per unit of risk. FDC International Hotels is currently generating about -0.01 per unit of risk. If you would invest 11,600 in Yulon Finance Corp on November 27, 2024 and sell it today you would earn a total of 450.00 from holding Yulon Finance Corp or generate 3.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yulon Finance Corp vs. FDC International Hotels
Performance |
| Timeline |
| Yulon Finance Corp |
| FDC International Hotels |
Yulon Finance and FDC International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and FDC International
The main advantage of trading using opposite Yulon Finance and FDC International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, FDC International 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 FDC International will offset losses from the drop in FDC International'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 |
| FDC International vs. Formosa International Hotels | FDC International vs. My Humble House | FDC International vs. Wanhwa Enterprise Co | FDC International vs. Gourmet Master Co |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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