Correlation Between GOLD ROAD and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both GOLD ROAD 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 GOLD ROAD and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GOLD ROAD RES and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on GOLD ROAD 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 GOLD ROAD with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of GOLD ROAD and Yuexiu Transport.
Diversification Opportunities for GOLD ROAD and Yuexiu Transport
0.36 | Correlation Coefficient |
Weak diversification
The 3 months correlation between GOLD and Yuexiu is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding GOLD ROAD RES 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 GOLD ROAD 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 GOLD ROAD RES 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 GOLD ROAD i.e., GOLD ROAD and Yuexiu Transport go up and down completely randomly.
Pair Corralation between GOLD ROAD and Yuexiu Transport
Assuming the 90 days trading horizon GOLD ROAD RES is expected to generate 0.92 times more return on investment than Yuexiu Transport. However, GOLD ROAD RES is 1.09 times less risky than Yuexiu Transport. It trades about 0.38 of its potential returns per unit of risk. Yuexiu Transport Infrastructure is currently generating about -0.04 per unit of risk. If you would invest 126.00 in GOLD ROAD RES on November 5, 2024 and sell it today you would earn a total of 20.00 from holding GOLD ROAD RES or generate 15.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
GOLD ROAD RES vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| GOLD ROAD RES |
| Yuexiu Transport Inf |
GOLD ROAD and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GOLD ROAD and Yuexiu Transport
The main advantage of trading using opposite GOLD ROAD and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GOLD ROAD 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.| GOLD ROAD vs. Hanison Construction Holdings | GOLD ROAD vs. Hitachi Construction Machinery | GOLD ROAD vs. Dairy Farm International | GOLD ROAD vs. Titan Machinery |
| Yuexiu Transport vs. Treasury Wine Estates | Yuexiu Transport vs. MGIC INVESTMENT | Yuexiu Transport vs. Apollo Investment Corp | Yuexiu Transport vs. US FOODS HOLDING |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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