Correlation Between Yuexiu Transport and Datang International
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Datang 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 Yuexiu Transport and Datang International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Yuexiu Transport Infrastructure and Datang International Power, you can compare the effects of market volatilities on Yuexiu Transport and Datang 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 Yuexiu Transport with a short position of Datang International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Datang International.
Diversification Opportunities for Yuexiu Transport and Datang International
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuexiu and Datang is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Datang International Power in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Datang International and Yuexiu Transport 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 Yuexiu Transport Infrastructure are associated (or correlated) with Datang International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Datang International has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Datang International go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Datang International
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.22 times more return on investment than Datang International. However, Yuexiu Transport is 1.22 times more volatile than Datang International Power. It trades about 0.07 of its potential returns per unit of risk. Datang International Power is currently generating about 0.02 per unit of risk. If you would invest 35.00 in Yuexiu Transport Infrastructure on September 24, 2024 and sell it today you would earn a total of 10.00 from holding Yuexiu Transport Infrastructure or generate 28.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Datang International Power
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Datang International |
Yuexiu Transport and Datang International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Datang International
The main advantage of trading using opposite Yuexiu Transport and Datang International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Datang 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 Datang International will offset losses from the drop in Datang International's long position.| Yuexiu Transport vs. Transurban Group | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Arcosa Inc |
| Datang International vs. Yuexiu Transport Infrastructure | Datang International vs. Verizon Communications | Datang International vs. TITANIUM TRANSPORTGROUP | Datang International vs. QUEEN S ROAD |
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 Bond Analysis module to evaluate and analyze corporate bonds as a potential investment for your portfolios..
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