Correlation Between Corporacion America and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Corporacion America 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 Corporacion America and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Corporacion America Airports and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Corporacion America 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 Corporacion America with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Corporacion America and Yuexiu Transport.
Diversification Opportunities for Corporacion America and Yuexiu Transport
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Corporacion and Yuexiu is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Corporacion America Airports 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 Corporacion America 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 Corporacion America Airports 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 Corporacion America i.e., Corporacion America and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Corporacion America and Yuexiu Transport
Given the investment horizon of 90 days Corporacion America Airports is expected to under-perform the Yuexiu Transport. But the stock apears to be less risky and, when comparing its historical volatility, Corporacion America Airports is 2.33 times less risky than Yuexiu Transport. The stock trades about -0.01 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 28, 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 Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Corporacion America Airports vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Corporacion America |
| Yuexiu Transport Inf |
Corporacion America and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Corporacion America and Yuexiu Transport
The main advantage of trading using opposite Corporacion America and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Corporacion America 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.| Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. Grupo Aeroportuario del | Corporacion America vs. AerSale Corp | Corporacion America vs. Flughafen Zrich AG |
| Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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