Correlation Between China Yuchai and Graco
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Graco 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 China Yuchai and Graco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between China Yuchai International and Graco Inc, you can compare the effects of market volatilities on China Yuchai and Graco 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 China Yuchai with a short position of Graco. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Graco.
Diversification Opportunities for China Yuchai and Graco
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Graco is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Graco Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Graco Inc and China Yuchai 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 China Yuchai International are associated (or correlated) with Graco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Graco Inc has no effect on the direction of China Yuchai i.e., China Yuchai and Graco go up and down completely randomly.
Pair Corralation between China Yuchai and Graco
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Graco. In addition to that, China Yuchai is 1.49 times more volatile than Graco Inc. It trades about -0.51 of its total potential returns per unit of risk. Graco Inc is currently generating about 0.34 per unit of volatility. If you would invest 8,214 in Graco Inc on August 26, 2024 and sell it today you would earn a total of 894.00 from holding Graco Inc or generate 10.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Graco Inc
Performance |
| Timeline |
| China Yuchai Interna |
| Graco Inc |
China Yuchai and Graco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Graco
The main advantage of trading using opposite China Yuchai and Graco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Graco 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 Graco will offset losses from the drop in Graco's long position.| China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp | China Yuchai vs. Deswell Industries |
| Graco vs. Aquagold International | Graco vs. Morningstar Unconstrained Allocation | Graco vs. High Yield Municipal Fund | Graco vs. Thrivent High Yield |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
Other Complementary Tools
| Correlation Analysis Reduce portfolio risk simply by holding instruments which are not perfectly correlated | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |