Correlation Between Adient PLC and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Adient PLC 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 Adient PLC and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Adient PLC and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Adient PLC 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 Adient PLC with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Adient PLC and Yuexiu Transport.
Diversification Opportunities for Adient PLC and Yuexiu Transport
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Adient and Yuexiu is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Adient PLC 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 Adient PLC 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 Adient PLC 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 Adient PLC i.e., Adient PLC and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Adient PLC and Yuexiu Transport
Given the investment horizon of 90 days Adient PLC is expected to under-perform the Yuexiu Transport. But the stock apears to be less risky and, when comparing its historical volatility, Adient PLC is 2.5 times less risky than Yuexiu Transport. The stock trades about -0.1 of its potential returns per unit of risk. The Yuexiu Transport Infrastructure is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Yuexiu Transport Infrastructure on August 31, 2024 and sell it today you would earn a total of 13.00 from holding Yuexiu Transport Infrastructure or generate 28.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Adient PLC vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Adient PLC |
| Yuexiu Transport Inf |
Adient PLC and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Adient PLC and Yuexiu Transport
The main advantage of trading using opposite Adient PLC and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Adient PLC 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.| Adient PLC vs. Gentex | Adient PLC vs. Autoliv | Adient PLC vs. Fox Factory Holding | Adient PLC vs. Dana Inc |
| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. SCOR PK | Yuexiu Transport vs. Aquagold International |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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