Correlation Between Flexible Solutions and Yuexiu Transport
Can any of the company-specific risk be diversified away by investing in both Flexible Solutions 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 Flexible Solutions and Yuexiu Transport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Flexible Solutions International and Yuexiu Transport Infrastructure, you can compare the effects of market volatilities on Flexible Solutions 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 Flexible Solutions with a short position of Yuexiu Transport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Flexible Solutions and Yuexiu Transport.
Diversification Opportunities for Flexible Solutions and Yuexiu Transport
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Flexible and Yuexiu is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Flexible Solutions Internation 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 Flexible Solutions 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 Flexible Solutions 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 Flexible Solutions i.e., Flexible Solutions and Yuexiu Transport go up and down completely randomly.
Pair Corralation between Flexible Solutions and Yuexiu Transport
Considering the 90-day investment horizon Flexible Solutions International is expected to under-perform the Yuexiu Transport. But the stock apears to be less risky and, when comparing its historical volatility, Flexible Solutions International is 1.23 times less risky than Yuexiu Transport. The stock trades about 0.0 of its potential returns per unit of risk. The Yuexiu Transport Infrastructure is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 45.00 in Yuexiu Transport Infrastructure on August 28, 2024 and sell it today you would earn a total of 13.00 from holding Yuexiu Transport Infrastructure or generate 28.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Flexible Solutions Internation vs. Yuexiu Transport Infrastructur
Performance |
| Timeline |
| Flexible Solutions |
| Yuexiu Transport Inf |
Flexible Solutions and Yuexiu Transport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Flexible Solutions and Yuexiu Transport
The main advantage of trading using opposite Flexible Solutions and Yuexiu Transport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Flexible Solutions 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.| Flexible Solutions vs. Oil Dri | Flexible Solutions vs. H B Fuller | Flexible Solutions vs. Northern Technologies | Flexible Solutions vs. Cabot |
| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. Aquagold International | Yuexiu Transport vs. Barloworld Ltd ADR |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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