Correlation Between Dairy Farm and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Dairy Farm and Yuexiu Transport 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 Dairy Farm and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Dairy Farm and Yuexiu Transport 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 Dairy Farm with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and Yuexiu Transport.
Diversification Opportunities for Dairy Farm and Yuexiu Transport
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Dairy and Yuexiu is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International and Yuexiu Transport Infrastructur in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Yuexiu Transport Inf and Dairy Farm 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 Dairy Farm International are associated (or correlated) with Yuexiu Transport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Yuexiu Transport Inf has no effect on the direction of Dairy Farm i.e., Dairy Farm and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Dairy Farm and Yuexiu Transport
Assuming the 90 days trading horizon Dairy Farm International is expected to generate 0.62 times more return on investment than Yuexiu Transport. However, Dairy Farm International is 1.63 times less risky than Yuexiu Transport. It trades about -0.06 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.14 per unit of risk. If you would invest 212.00 in Dairy Farm International on October 25, 2024 and sell it today you would lose (4.00) from holding Dairy Farm International or give up 1.89% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dairy Farm International vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Dairy Farm International |
| Yuexiu Transport Inf |
Dairy Farm and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and Yuexiu Transport
The main advantage of trading using opposite Dairy Farm and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm position performs unexpectedly, Yuexiu Transport 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 Yuexiu Transport will offset losses from the drop in Yuexiu Transport's long position.| Dairy Farm vs. Highlight Communications AG | Dairy Farm vs. Entravision Communications | Dairy Farm vs. Charter Communications | Dairy Farm vs. MACOM Technology Solutions |
| Yuexiu Transport vs. Universal Health Realty | Yuexiu Transport vs. Phibro Animal Health | Yuexiu Transport vs. CLOVER HEALTH INV | Yuexiu Transport vs. MPH Health Care |
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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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