Correlation Between BROADWIND ENRGY and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both BROADWIND ENRGY and Yuexiu Transport 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 BROADWIND ENRGY and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BROADWIND ENRGY and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on BROADWIND ENRGY and Yuexiu Transport 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 BROADWIND ENRGY with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of BROADWIND ENRGY and Yuexiu Transport.
Diversification Opportunities for BROADWIND ENRGY and Yuexiu Transport
0.09 | Correlation Coefficient |
Significant diversification
The 3 months correlation between BROADWIND and Yuexiu is 0.09. Overlapping area represents the amount of risk that can be diversified away by holding BROADWIND ENRGY and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and BROADWIND ENRGY 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 BROADWIND ENRGY are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of BROADWIND ENRGY i.e., BROADWIND ENRGY and Yuexiu Transport go up and down completely randomly.
Pair Corralation between BROADWIND ENRGY and Yuexiu Transport
Assuming the 90 days trading horizon BROADWIND ENRGY is expected to under-perform the Yuexiu Transport. In addition to that, BROADWIND ENRGY is 2.11 times more volatile than Yuexiu Transport Infrastructure. It trades about -0.28 of its total potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.04 per unit of volatility. If you would invest 46.00 in Yuexiu Transport Infrastructure on November 5, 2024 and sell it today you would lose (1.00) from holding Yuexiu Transport Infrastructure or give up 2.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
BROADWIND ENRGY vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| BROADWIND ENRGY |
| Yuexiu Transport Inf |
BROADWIND ENRGY and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BROADWIND ENRGY and Yuexiu Transport
The main advantage of trading using opposite BROADWIND ENRGY and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BROADWIND ENRGY position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| BROADWIND ENRGY vs. Rayonier Advanced Materials | BROADWIND ENRGY vs. Guangdong Investment Limited | BROADWIND ENRGY vs. VULCAN MATERIALS | BROADWIND ENRGY vs. Keck Seng Investments |
| Yuexiu Transport vs. Treasury Wine Estates | Yuexiu Transport vs. MGIC INVESTMENT | Yuexiu Transport vs. Apollo Investment Corp | Yuexiu Transport vs. US FOODS HOLDING |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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