Correlation Between China Yuchai and Greenland Acquisition
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Greenland Acquisition 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 Greenland Acquisition 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 Greenland Acquisition Corp, you can compare the effects of market volatilities on China Yuchai and Greenland Acquisition 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 Greenland Acquisition. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Greenland Acquisition.
Diversification Opportunities for China Yuchai and Greenland Acquisition
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between China and Greenland is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Greenland Acquisition Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Greenland Acquisition 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 Greenland Acquisition. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Greenland Acquisition has no effect on the direction of China Yuchai i.e., China Yuchai and Greenland Acquisition go up and down completely randomly.
Pair Corralation between China Yuchai and Greenland Acquisition
Considering the 90-day investment horizon China Yuchai International is expected to generate 0.49 times more return on investment than Greenland Acquisition. However, China Yuchai International is 2.05 times less risky than Greenland Acquisition. It trades about -0.01 of its potential returns per unit of risk. Greenland Acquisition Corp is currently generating about -0.06 per unit of risk. If you would invest 910.00 in China Yuchai International on September 14, 2024 and sell it today you would lose (8.00) from holding China Yuchai International or give up 0.88% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Greenland Acquisition Corp
Performance |
| Timeline |
| China Yuchai Interna |
| Greenland Acquisition |
China Yuchai and Greenland Acquisition Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Greenland Acquisition
The main advantage of trading using opposite China Yuchai and Greenland Acquisition positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Greenland Acquisition 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 Greenland Acquisition will offset losses from the drop in Greenland Acquisition'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 |
| Greenland Acquisition vs. Hurco Companies | Greenland Acquisition vs. Enerpac Tool Group | Greenland Acquisition vs. China Yuchai International | Greenland Acquisition vs. Luxfer Holdings PLC |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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