Correlation Between China Yuchai and Retailing Fund
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Retailing Fund 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 Retailing Fund 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 Retailing Fund Investor, you can compare the effects of market volatilities on China Yuchai and Retailing Fund 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 Retailing Fund. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Retailing Fund.
Diversification Opportunities for China Yuchai and Retailing Fund
0.35 | Correlation Coefficient |
Weak diversification
The 3 months correlation between China and Retailing is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Retailing Fund Investor in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Retailing Fund Investor 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 Retailing Fund. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Retailing Fund Investor has no effect on the direction of China Yuchai i.e., China Yuchai and Retailing Fund go up and down completely randomly.
Pair Corralation between China Yuchai and Retailing Fund
Considering the 90-day investment horizon China Yuchai International is expected to generate 2.47 times more return on investment than Retailing Fund. However, China Yuchai is 2.47 times more volatile than Retailing Fund Investor. It trades about 0.03 of its potential returns per unit of risk. Retailing Fund Investor is currently generating about 0.06 per unit of risk. If you would invest 857.00 in China Yuchai International on November 2, 2024 and sell it today you would earn a total of 237.50 from holding China Yuchai International or generate 27.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Retailing Fund Investor
Performance |
| Timeline |
| China Yuchai Interna |
| Retailing Fund Investor |
China Yuchai and Retailing Fund Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Retailing Fund
The main advantage of trading using opposite China Yuchai and Retailing Fund positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Retailing Fund 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 Retailing Fund will offset losses from the drop in Retailing Fund'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 |
| Retailing Fund vs. Leisure Fund Investor | Retailing Fund vs. Banking Fund Investor | Retailing Fund vs. Technology Fund Investor | Retailing Fund vs. Financial Services Fund |
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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