Correlation Between China Yuchai and Generac Holdings
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Generac Holdings 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 Generac Holdings 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 Generac Holdings, you can compare the effects of market volatilities on China Yuchai and Generac Holdings 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 Generac Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Generac Holdings.
Diversification Opportunities for China Yuchai and Generac Holdings
-0.6 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Generac is -0.6. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Generac Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Generac Holdings 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 Generac Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Generac Holdings has no effect on the direction of China Yuchai i.e., China Yuchai and Generac Holdings go up and down completely randomly.
Pair Corralation between China Yuchai and Generac Holdings
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Generac Holdings. In addition to that, China Yuchai is 1.04 times more volatile than Generac Holdings. It trades about -0.46 of its total potential returns per unit of risk. Generac Holdings is currently generating about 0.32 per unit of volatility. If you would invest 16,565 in Generac Holdings on August 27, 2024 and sell it today you would earn a total of 2,343 from holding Generac Holdings or generate 14.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Generac Holdings
Performance |
| Timeline |
| China Yuchai Interna |
| Generac Holdings |
China Yuchai and Generac Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Generac Holdings
The main advantage of trading using opposite China Yuchai and Generac Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Generac Holdings 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 Generac Holdings will offset losses from the drop in Generac Holdings' 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 |
| Generac Holdings vs. Graco Inc | Generac Holdings vs. Franklin Electric Co | Generac Holdings vs. Flowserve | Generac Holdings vs. Donaldson |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Theme Ratings Determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA |