Correlation Between China Yuchai and Gorman Rupp
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Gorman Rupp 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 Gorman Rupp 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 Gorman Rupp, you can compare the effects of market volatilities on China Yuchai and Gorman Rupp 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 Gorman Rupp. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Gorman Rupp.
Diversification Opportunities for China Yuchai and Gorman Rupp
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Gorman is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Gorman Rupp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gorman Rupp 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 Gorman Rupp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gorman Rupp has no effect on the direction of China Yuchai i.e., China Yuchai and Gorman Rupp go up and down completely randomly.
Pair Corralation between China Yuchai and Gorman Rupp
Considering the 90-day investment horizon China Yuchai is expected to generate 2.01 times less return on investment than Gorman Rupp. In addition to that, China Yuchai is 2.09 times more volatile than Gorman Rupp. It trades about 0.01 of its total potential returns per unit of risk. Gorman Rupp is currently generating about 0.03 per unit of volatility. If you would invest 3,719 in Gorman Rupp on October 25, 2024 and sell it today you would earn a total of 84.00 from holding Gorman Rupp or generate 2.26% 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. Gorman Rupp
Performance |
| Timeline |
| China Yuchai Interna |
| Gorman Rupp |
China Yuchai and Gorman Rupp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Gorman Rupp
The main advantage of trading using opposite China Yuchai and Gorman Rupp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Gorman Rupp 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 Gorman Rupp will offset losses from the drop in Gorman Rupp's long position.| China Yuchai vs. China Automotive Systems | China Yuchai vs. China Natural Resources | China Yuchai vs. Sonida Senior Living | China Yuchai vs. UTStarcom Holdings Corp |
| Gorman Rupp vs. Standex International | Gorman Rupp vs. Franklin Electric Co | Gorman Rupp vs. Omega Flex | Gorman Rupp vs. China Yuchai 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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