Correlation Between Yulon Finance and Thunder Tiger
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Thunder Tiger 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 Thunder Tiger 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 Thunder Tiger Corp, you can compare the effects of market volatilities on Yulon Finance and Thunder Tiger 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 Thunder Tiger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Thunder Tiger.
Diversification Opportunities for Yulon Finance and Thunder Tiger
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yulon and Thunder is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and Thunder Tiger Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thunder Tiger 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 Thunder Tiger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thunder Tiger Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and Thunder Tiger go up and down completely randomly.
Pair Corralation between Yulon Finance and Thunder Tiger
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Thunder Tiger. But the stock apears to be less risky and, when comparing its historical volatility, Yulon Finance Corp is 1.24 times less risky than Thunder Tiger. The stock trades about -0.09 of its potential returns per unit of risk. The Thunder Tiger Corp is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest 7,380 in Thunder Tiger Corp on September 1, 2024 and sell it today you would lose (1,680) from holding Thunder Tiger Corp or give up 22.76% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.22% |
| Values | Daily Returns |
Yulon Finance Corp vs. Thunder Tiger Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| Thunder Tiger Corp |
Yulon Finance and Thunder Tiger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Thunder Tiger
The main advantage of trading using opposite Yulon Finance and Thunder Tiger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Thunder Tiger 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 Thunder Tiger will offset losses from the drop in Thunder Tiger's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding |
| Thunder Tiger vs. Chaintech Technology Corp | Thunder Tiger vs. AVerMedia Technologies | Thunder Tiger vs. Avision | Thunder Tiger vs. Clevo 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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