Correlation Between Daily Journal and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Daily Journal 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 Daily Journal and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Daily Journal Corp and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Daily Journal 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 Daily Journal with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Daily Journal and Yuexiu Transport.
Diversification Opportunities for Daily Journal and Yuexiu Transport
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Daily and Yuexiu is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Daily Journal Corp 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 Daily Journal 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 Daily Journal Corp 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 Daily Journal i.e., Daily Journal and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Daily Journal and Yuexiu Transport
Given the investment horizon of 90 days Daily Journal Corp is expected to generate 10.07 times more return on investment than Yuexiu Transport. However, Daily Journal is 10.07 times more volatile than Yuexiu Transport Infrastructure. It trades about 0.18 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about 0.22 per unit of risk. If you would invest 49,343 in Daily Journal Corp on September 2, 2024 and sell it today you would earn a total of 7,108 from holding Daily Journal Corp or generate 14.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Daily Journal Corp vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Daily Journal Corp |
| Yuexiu Transport Inf |
Daily Journal and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Daily Journal and Yuexiu Transport
The main advantage of trading using opposite Daily Journal and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Daily Journal 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.| Daily Journal vs. Meridianlink | Daily Journal vs. CoreCard Corp | Daily Journal vs. Enfusion | Daily Journal vs. Issuer Direct Corp |
| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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