Correlation Between Yulon Finance and Momo
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and Momo 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 Momo 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 momo Inc, you can compare the effects of market volatilities on Yulon Finance and Momo 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 Momo. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and Momo.
Diversification Opportunities for Yulon Finance and Momo
0.73 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and Momo is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and momo Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on momo Inc 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 Momo. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of momo Inc has no effect on the direction of Yulon Finance i.e., Yulon Finance and Momo go up and down completely randomly.
Pair Corralation between Yulon Finance and Momo
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the Momo. In addition to that, Yulon Finance is 1.5 times more volatile than momo Inc. It trades about -0.15 of its total potential returns per unit of risk. momo Inc is currently generating about -0.08 per unit of volatility. If you would invest 39,100 in momo Inc on September 2, 2024 and sell it today you would lose (2,750) from holding momo Inc or give up 7.03% 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. momo Inc
Performance |
| Timeline |
| Yulon Finance Corp |
| momo Inc |
Yulon Finance and Momo Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and Momo
The main advantage of trading using opposite Yulon Finance and Momo positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, Momo 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 Momo will offset losses from the drop in Momo'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 |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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