Correlation Between Yulon Finance and CTCI Corp
Can any of the company-specific risk be diversified away by investing in both Yulon Finance and CTCI 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 CTCI 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 CTCI Corp, you can compare the effects of market volatilities on Yulon Finance and CTCI 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 CTCI Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yulon Finance and CTCI Corp.
Diversification Opportunities for Yulon Finance and CTCI Corp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yulon and CTCI is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Yulon Finance Corp and CTCI Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CTCI 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 CTCI Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CTCI Corp has no effect on the direction of Yulon Finance i.e., Yulon Finance and CTCI Corp go up and down completely randomly.
Pair Corralation between Yulon Finance and CTCI Corp
Assuming the 90 days trading horizon Yulon Finance Corp is expected to under-perform the CTCI Corp. In addition to that, Yulon Finance is 2.65 times more volatile than CTCI Corp. It trades about -0.3 of its total potential returns per unit of risk. CTCI Corp is currently generating about -0.36 per unit of volatility. If you would invest 4,410 in CTCI Corp on September 1, 2024 and sell it today you would lose (325.00) from holding CTCI Corp or give up 7.37% 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. CTCI Corp
Performance |
| Timeline |
| Yulon Finance Corp |
| CTCI Corp |
Yulon Finance and CTCI Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yulon Finance and CTCI Corp
The main advantage of trading using opposite Yulon Finance and CTCI Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yulon Finance position performs unexpectedly, CTCI 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 CTCI Corp will offset losses from the drop in CTCI Corp's long position.| Yulon Finance vs. Central Reinsurance Corp | Yulon Finance vs. Huaku Development Co | Yulon Finance vs. Fubon Financial Holding | Yulon Finance vs. CTBC Financial Holding |
| CTCI Corp vs. Taiwan Secom Co | CTCI Corp vs. Pou Chen Corp | CTCI Corp vs. Formosa Petrochemical Corp | CTCI Corp vs. Cheng Shin Rubber |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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