Correlation Between ARISTOCRAT LEISURE and Yixin Group
Can any of the company-specific risk be diversified away by investing in both ARISTOCRAT LEISURE and Yixin Group 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 ARISTOCRAT LEISURE and Yixin Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ARISTOCRAT LEISURE and Yixin Group Limited, you can compare the effects of market volatilities on ARISTOCRAT LEISURE and Yixin Group 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 ARISTOCRAT LEISURE with a short position of Yixin Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of ARISTOCRAT LEISURE and Yixin Group.
Diversification Opportunities for ARISTOCRAT LEISURE and Yixin Group
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between ARISTOCRAT and Yixin is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding ARISTOCRAT LEISURE and Yixin Group Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yixin Group Limited and ARISTOCRAT LEISURE 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 ARISTOCRAT LEISURE are associated (or correlated) with Yixin Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yixin Group Limited has no effect on the direction of ARISTOCRAT LEISURE i.e., ARISTOCRAT LEISURE and Yixin Group go up and down completely randomly.
Pair Corralation between ARISTOCRAT LEISURE and Yixin Group
Assuming the 90 days trading horizon ARISTOCRAT LEISURE is expected to generate 0.27 times more return on investment than Yixin Group. However, ARISTOCRAT LEISURE is 3.71 times less risky than Yixin Group. It trades about 0.51 of its potential returns per unit of risk. Yixin Group Limited is currently generating about 0.07 per unit of risk. If you would invest 3,722 in ARISTOCRAT LEISURE on September 4, 2024 and sell it today you would earn a total of 418.00 from holding ARISTOCRAT LEISURE or generate 11.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
ARISTOCRAT LEISURE vs. Yixin Group Limited
Performance |
| Timeline |
| ARISTOCRAT LEISURE |
| Yixin Group Limited |
ARISTOCRAT LEISURE and Yixin Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ARISTOCRAT LEISURE and Yixin Group
The main advantage of trading using opposite ARISTOCRAT LEISURE and Yixin Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ARISTOCRAT LEISURE position performs unexpectedly, Yixin Group 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 Yixin Group will offset losses from the drop in Yixin Group's long position.| ARISTOCRAT LEISURE vs. TOTAL GABON | ARISTOCRAT LEISURE vs. Walgreens Boots Alliance | ARISTOCRAT LEISURE vs. Peak Resources Limited |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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