Correlation Between Yuexiu Transport and UNITED RENTALS
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and UNITED RENTALS 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 UNITED RENTALS 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 UNITED RENTALS, you can compare the effects of market volatilities on Yuexiu Transport and UNITED RENTALS 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 UNITED RENTALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and UNITED RENTALS.
Diversification Opportunities for Yuexiu Transport and UNITED RENTALS
-0.23 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Yuexiu and UNITED is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and UNITED RENTALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNITED RENTALS 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 UNITED RENTALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNITED RENTALS has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and UNITED RENTALS go up and down completely randomly.
Pair Corralation between Yuexiu Transport and UNITED RENTALS
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.83 times more return on investment than UNITED RENTALS. However, Yuexiu Transport is 1.83 times more volatile than UNITED RENTALS. It trades about 0.08 of its potential returns per unit of risk. UNITED RENTALS is currently generating about 0.05 per unit of risk. If you would invest 32.00 in Yuexiu Transport Infrastructure on October 25, 2024 and sell it today you would earn a total of 12.00 from holding Yuexiu Transport Infrastructure or generate 37.5% 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. UNITED RENTALS
Performance |
| Timeline |
| Yuexiu Transport Inf |
| UNITED RENTALS |
Yuexiu Transport and UNITED RENTALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and UNITED RENTALS
The main advantage of trading using opposite Yuexiu Transport and UNITED RENTALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, UNITED RENTALS 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 UNITED RENTALS will offset losses from the drop in UNITED RENTALS'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 |
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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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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