Correlation Between Yuexiu Transport and Renesas Electronics
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Renesas Electronics 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 Renesas Electronics 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 Renesas Electronics, you can compare the effects of market volatilities on Yuexiu Transport and Renesas Electronics 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 Renesas Electronics. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Renesas Electronics.
Diversification Opportunities for Yuexiu Transport and Renesas Electronics
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Yuexiu and Renesas is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Renesas Electronics in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Renesas Electronics 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 Renesas Electronics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Renesas Electronics has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Renesas Electronics go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Renesas Electronics
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.42 times more return on investment than Renesas Electronics. However, Yuexiu Transport is 1.42 times more volatile than Renesas Electronics. It trades about 0.07 of its potential returns per unit of risk. Renesas Electronics is currently generating about 0.03 per unit of risk. If you would invest 16.00 in Yuexiu Transport Infrastructure on October 25, 2024 and sell it today you would earn a total of 28.00 from holding Yuexiu Transport Infrastructure or generate 175.0% 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. Renesas Electronics
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Renesas Electronics |
Yuexiu Transport and Renesas Electronics Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Renesas Electronics
The main advantage of trading using opposite Yuexiu Transport and Renesas Electronics positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Renesas Electronics 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 Renesas Electronics will offset losses from the drop in Renesas Electronics' long position.| Yuexiu Transport vs. Clean Energy Fuels | Yuexiu Transport vs. YATRA ONLINE DL 0001 | Yuexiu Transport vs. Cleanaway Waste Management | Yuexiu Transport vs. SCANSOURCE |
| Renesas Electronics vs. VITEC SOFTWARE GROUP | Renesas Electronics vs. TOMBADOR IRON LTD | Renesas Electronics vs. GBS Software AG | Renesas Electronics vs. Kingdee International Software |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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