Correlation Between China Yuchai and Ingersoll Rand
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Ingersoll Rand 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 Ingersoll Rand 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 Ingersoll Rand, you can compare the effects of market volatilities on China Yuchai and Ingersoll Rand 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 Ingersoll Rand. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Ingersoll Rand.
Diversification Opportunities for China Yuchai and Ingersoll Rand
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Ingersoll is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Ingersoll Rand in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ingersoll Rand 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 Ingersoll Rand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ingersoll Rand has no effect on the direction of China Yuchai i.e., China Yuchai and Ingersoll Rand go up and down completely randomly.
Pair Corralation between China Yuchai and Ingersoll Rand
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Ingersoll Rand. In addition to that, China Yuchai is 1.28 times more volatile than Ingersoll Rand. It trades about -0.51 of its total potential returns per unit of risk. Ingersoll Rand is currently generating about 0.21 per unit of volatility. If you would invest 9,709 in Ingersoll Rand on August 29, 2024 and sell it today you would earn a total of 765.00 from holding Ingersoll Rand or generate 7.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Ingersoll Rand
Performance |
| Timeline |
| China Yuchai Interna |
| Ingersoll Rand |
China Yuchai and Ingersoll Rand Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Ingersoll Rand
The main advantage of trading using opposite China Yuchai and Ingersoll Rand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Ingersoll Rand 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 Ingersoll Rand will offset losses from the drop in Ingersoll Rand'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 |
| Ingersoll Rand vs. IDEX Corporation | Ingersoll Rand vs. Flowserve | Ingersoll Rand vs. Donaldson | Ingersoll Rand vs. Franklin Electric Co |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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