Correlation Between China Yuchai and JE Cleantech
Can any of the company-specific risk be diversified away by investing in both China Yuchai and JE Cleantech 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 JE Cleantech 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 JE Cleantech Holdings, you can compare the effects of market volatilities on China Yuchai and JE Cleantech 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 JE Cleantech. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and JE Cleantech.
Diversification Opportunities for China Yuchai and JE Cleantech
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between China and JCSE is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and JE Cleantech Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JE Cleantech 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 JE Cleantech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JE Cleantech Holdings has no effect on the direction of China Yuchai i.e., China Yuchai and JE Cleantech go up and down completely randomly.
Pair Corralation between China Yuchai and JE Cleantech
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the JE Cleantech. But the stock apears to be less risky and, when comparing its historical volatility, China Yuchai International is 6.77 times less risky than JE Cleantech. The stock trades about -0.01 of its potential returns per unit of risk. The JE Cleantech Holdings is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 116.00 in JE Cleantech Holdings on September 14, 2024 and sell it today you would earn a total of 38.00 from holding JE Cleantech Holdings or generate 32.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. JE Cleantech Holdings
Performance |
| Timeline |
| China Yuchai Interna |
| JE Cleantech Holdings |
China Yuchai and JE Cleantech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and JE Cleantech
The main advantage of trading using opposite China Yuchai and JE Cleantech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, JE Cleantech 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 JE Cleantech will offset losses from the drop in JE Cleantech'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 |
| JE Cleantech vs. Hurco Companies | JE Cleantech vs. Enerpac Tool Group | JE Cleantech vs. China Yuchai International | JE Cleantech 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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