Correlation Between Yuexiu Transport and China Aircraft
Can any of the company-specific risk be diversified away by investing in both Yuexiu Transport and China Aircraft 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 China Aircraft 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 China Aircraft Leasing, you can compare the effects of market volatilities on Yuexiu Transport and China Aircraft 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 China Aircraft. Check out your portfolio center. Please also check ongoing floating volatility patterns of Yuexiu Transport and China Aircraft.
Diversification Opportunities for Yuexiu Transport and China Aircraft
1.0 | Correlation Coefficient |
No risk reduction
The 3 months correlation between Yuexiu and China is 1.0. Overlapping area represents the amount of risk that can be diversified away by holding Yuexiu Transport Infrastructur and China Aircraft Leasing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Aircraft Leasing 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 China Aircraft. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Aircraft Leasing has no effect on the direction of Yuexiu Transport i.e., Yuexiu Transport and China Aircraft go up and down completely randomly.
Pair Corralation between Yuexiu Transport and China Aircraft
Assuming the 90 days horizon Yuexiu Transport Infrastructure is expected to generate 0.55 times more return on investment than China Aircraft. However, Yuexiu Transport Infrastructure is 1.81 times less risky than China Aircraft. It trades about 0.09 of its potential returns per unit of risk. China Aircraft Leasing is currently generating about -0.02 per unit of risk. If you would invest 43.00 in Yuexiu Transport Infrastructure on November 27, 2024 and sell it today you would earn a total of 15.00 from holding Yuexiu Transport Infrastructure or generate 34.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Yuexiu Transport Infrastructur vs. China Aircraft Leasing
Performance |
| Timeline |
| Yuexiu Transport Inf |
| China Aircraft Leasing |
Yuexiu Transport and China Aircraft Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Yuexiu Transport and China Aircraft
The main advantage of trading using opposite Yuexiu Transport and China Aircraft positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Yuexiu Transport position performs unexpectedly, China Aircraft 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 China Aircraft will offset losses from the drop in China Aircraft's long position.| Yuexiu Transport vs. Zhejiang Expressway Co | Yuexiu Transport vs. Jiangsu Expressway Co | Yuexiu Transport vs. Jiangsu Expressway | Yuexiu Transport vs. Verra Mobility Corp |
| China Aircraft vs. Columbia Sportswear | China Aircraft vs. City Office REIT | China Aircraft vs. Tandy Leather Factory | China Aircraft vs. Figs Inc |
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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