Correlation Between China Yuchai and Standex International
Can any of the company-specific risk be diversified away by investing in both China Yuchai and Standex International 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 Standex International 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 Standex International, you can compare the effects of market volatilities on China Yuchai and Standex International 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 Standex International. Check out your portfolio center. Please also check ongoing floating volatility patterns of China Yuchai and Standex International.
Diversification Opportunities for China Yuchai and Standex International
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between China and Standex is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding China Yuchai International and Standex International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Standex International 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 Standex International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Standex International has no effect on the direction of China Yuchai i.e., China Yuchai and Standex International go up and down completely randomly.
Pair Corralation between China Yuchai and Standex International
Considering the 90-day investment horizon China Yuchai International is expected to under-perform the Standex International. But the stock apears to be less risky and, when comparing its historical volatility, China Yuchai International is 1.35 times less risky than Standex International. The stock trades about -0.54 of its potential returns per unit of risk. The Standex International is currently generating about 0.27 of returns per unit of risk over similar time horizon. If you would invest 17,221 in Standex International on August 24, 2024 and sell it today you would earn a total of 2,959 from holding Standex International or generate 17.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
China Yuchai International vs. Standex International
Performance |
| Timeline |
| China Yuchai Interna |
| Standex International |
China Yuchai and Standex International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with China Yuchai and Standex International
The main advantage of trading using opposite China Yuchai and Standex International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if China Yuchai position performs unexpectedly, Standex International 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 Standex International will offset losses from the drop in Standex International'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 |
| Standex International vs. Gorman Rupp | Standex International vs. Franklin Electric Co | Standex International vs. Omega Flex | Standex International vs. China Yuchai International |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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