Correlation Between Yuexiu Transport and Biglari Holdings
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and Biglari Holdings 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 Biglari Holdings 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 Biglari Holdings, you can compare the effects of market volatilities on Yuexiu Transport and Biglari Holdings 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 Biglari Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and Biglari Holdings.
Diversification Opportunities for Yuexiu Transport and Biglari Holdings
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Yuexiu and Biglari is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and Biglari Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Biglari Holdings 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 Biglari Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Biglari Holdings has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and Biglari Holdings go up and down completely randomly.
Pair Corralation between Yuexiu Transport and Biglari Holdings
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 1.36 times more return on investment than Biglari Holdings. However, Yuexiu Transport is 1.36 times more volatile than Biglari Holdings. It trades about 0.09 of its potential returns per unit of risk. Biglari Holdings is currently generating about 0.05 per unit of risk. If you would invest 20.00 in Yuexiu Transport Infrastructure on August 28, 2024 and sell it today you would earn a total of 38.00 from holding Yuexiu Transport Infrastructure or generate 190.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. Biglari Holdings
Performance |
| Timeline |
| Yuexiu Transport Inf |
| Biglari Holdings |
Yuexiu Transport and Biglari Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and Biglari Holdings
The main advantage of trading using opposite Yuexiu Transport and Biglari Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, Biglari Holdings 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 Biglari Holdings will offset losses from the drop in Biglari Holdings' long position.| Yuexiu Transport vs. Verra Mobility Corp | Yuexiu Transport vs. HUMANA INC | Yuexiu Transport vs. Aquagold International | Yuexiu Transport vs. Barloworld Ltd ADR |
| Biglari Holdings vs. Cannae Holdings | Biglari Holdings vs. BJs Restaurants | Biglari Holdings vs. Ark Restaurants Corp | Biglari Holdings vs. Noble Romans |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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