Correlation Between China Yuchai and Formidable Fortress
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Formidable Fortress 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 Formidable Fortress 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 Formidable Fortress ETF, you can compare the effects of market volatilities on China Yuchai and Formidable Fortress 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 Formidable Fortress. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Formidable Fortress.
Diversification Opportunities for China Yuchai and Formidable Fortress
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between China and Formidable is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Formidable Fortress ETF in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Formidable Fortress ETF 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 Formidable Fortress. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Formidable Fortress ETF has no effect on the direction of China Yuchai i.e., China Yuchai and Formidable Fortress go up and down completely randomly.
Pair Corralation between China Yuchai and Formidable Fortress
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Formidable Fortress. In addition to that, China Yuchai is 2.8 times more volatile than Formidable Fortress ETF. It trades about 0.0 of its total potential returns per unit of risk. Formidable Fortress ETF is currently generating about 0.08 per unit of volatility. If you would invest 2,541 in Formidable Fortress ETF on August 26, 2024 and sell it today you would earn a total of 537.00 from holding Formidable Fortress ETF or generate 21.13% 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. Formidable Fortress ETF
Performance |
| Timeline |
| China Yuchai Interna |
| Formidable Fortress ETF |
China Yuchai and Formidable Fortress Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Formidable Fortress
The main advantage of trading using opposite China Yuchai and Formidable Fortress positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Formidable Fortress 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 Formidable Fortress will offset losses from the drop in Formidable Fortress' 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 |
| Formidable Fortress vs. Vanguard Mid Cap Index | Formidable Fortress vs. Vanguard Extended Market | Formidable Fortress vs. iShares Core SP | Formidable Fortress vs. SPDR SP MIDCAP |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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