Correlation Between Yuexiu Transport and Dairy Farm
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Dairy Farm 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 Dairy Farm 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 Dairy Farm International, you can compare the effects of market volatilities on Yuexiu Transport and Dairy Farm 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 Dairy Farm. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Dairy Farm.
Diversification Opportunities for Yuexiu Transport and Dairy Farm
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Yuexiu and Dairy is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Dairy Farm International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dairy Farm 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 Dairy Farm. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dairy Farm International has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Dairy Farm go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Dairy Farm
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to under-perform the Dairy Farm. In addition to that, Yuexiu Transport is 1.63 times more volatile than Dairy Farm International. It trades about -0.14 of its total potential returns per unit of risk. Dairy Farm International is currently generating about -0.06 per unit of volatility. 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 |
Yuexiu Transport Infrastructur vs. Dairy Farm International
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Dairy Farm International |
Yuexiu Transport and Dairy Farm Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Dairy Farm
The main advantage of trading using opposite Yuexiu Transport and Dairy Farm positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Dairy Farm 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 Dairy Farm will offset losses from the drop in Dairy Farm's long position.| Yuexiu Transport vs. Universal Health Realty | Yuexiu Transport vs. Phibro Animal Health | Yuexiu Transport vs. CLOVER HEALTH INV | Yuexiu Transport vs. MPH Health Care |
| Dairy Farm vs. Highlight Communications AG | Dairy Farm vs. Entravision Communications | Dairy Farm vs. Charter Communications | Dairy Farm vs. MACOM Technology Solutions |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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